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Bank of America Ordered to Pay US$46 Million for Foreclosure Strategies

Bank of America was told to pay a US$46 million judgment last week after it wrongfully foreclosed on a Lincoln, California, based couple during the recession. The order by Sacramento bankruptcy court Judge Christopher M. Klein describes in detail how the bank improperly engaged and foreclosed on Erik and Renee Sundquist's Lincoln residence.

The judge awarded about US$1 million in actual damages to the couple. Klein gave the rest of the sum to outside entities focused on consumer law and education, including the National Consumer Law Center and several University of California law schools. The trouble began in 2009 when the Charlotte, North Caroline – based bank reportedly asked the struggling couple to default on the loan in order to obtain a mortgage modification. But the bank refused to honor that promise, according to court documents. At that point, the Sundquists filed for Chapter 13 bankruptcy, which triggered a stay on the foreclosure process. The bank disregarded the stay and started eviction proceedings. This included sending workers to the property on multiple occasions.

Bank of America eventually gained possession of the property for six months, after which it then agreed that the foreclosure had been a mistake. The company returned the keys to the Sundquists. When they re-entered their home, the major appliances had been removed and the lawn was dead, according to the court.

News Characteristics

Date : Mar 29, 2017
Region : North America
Industry : Banks
Function : Risk Management
Sub-Function : Fraud Management