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Bank of America Being Sued for Loan Modification Processes

With hundreds of complaints flooding in to attorney generals about Bank of America loan modification practices, two states have decided to file law suits against the bank.

According to a recent article in the New York Times, the attorney generals in both states have accused the bank of lying to customers and saying that a home would not go into foreclosure while owners waited for a mortgage modification to go through only to foreclose on the property anyway. In addition, the bank is accused of making modification promises and then not keeping them, as well as telling homeowners that he or she must first be in default to be able to qualify for a loan modification.

While news recently broke on these two states filing lawsuits, nationwide a number of other banks are also at the center of investigations looking into the entire process that banks were using when homeowners were attempting to receive modifications in order to not lose homes to foreclosure. The claim is that many banks had robo-signers, who were just signing away without actually reading the foreclosure paperwork.

Other nationwide complaints include banks losing documents, failing to return calls and foreclosing on a home even though the owner was led to believe a modification was still being negotiated.

In the case of the Bank or America, which was nationally ranked last in terms of customers experiences, has denied all of the allegations and claims to have made significant improvements in the way modification business is conducted.

The investigations looking into banking practices throughout the country are also still ongoing.

Source: The New York Times, “Two States Sue Bank of America Over Mortgages,” Andrew Martin and Michael Powell, 17 Dec 2010

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