Bank of America Corp. has agreed to pay more than $6 million to a California couple whom a federal judge said had been harassed and illegally foreclosed upon by the bank's mortgage unit, ending an eight-year-long dispute.

The proposed settlement between the bank and Erik and Renee Sundquist would enable them "to end a long personal and legal nightmare that has impacted every facet of their and their sons' lives," according to court papers the couple filed to request that their 2014 lawsuit against the bank be dropped.

The deal calls for Bank of America to pay a fraction of the fine of more than $46 million ordered by Judge Christopher Klein in March. In his ruling, the judge said the bank's mortgage modification process and mistaken foreclosure on the Sundquists' home in Lincoln, Calif., left them in "a state of battle-fatigued demoralization."


The exact amount that the bank will pay the Sundquists is confidential, according to documents filed Tuesday in U.S. Bankruptcy Court in Sacramento. The earlier order called for the bank to pay the couple nearly $6.1 million in damages.

The couple had stopped making mortgage payments in March 2009 after Bank of America officials said they wouldn't consider loan modifications for customers who were current on payments. In the following years, their roughly 20 loan-modification requests were "routinely either lost or declared insufficient, or incomplete or stale or in need of resubmission or denied without comprehensible explanation," the judge's ruling said.

The couple filed for bankruptcy in June 2010. Filings halt foreclosure sales, but the judge said the bank still improperly took over the home and gave them a three-day eviction notice. The couple moved out, and Ms. Sundquist was hospitalized with stress-related symptoms of a heart attack several weeks later.

Bank of America officials eventually reversed the sale. The couple moved back in several months later and received a $20,000 fine from their homeowner association for dead landscaping, the ruling said.

The 107-page court opinion included excerpts from Renee Sundquist's journal that documented harassing visits from bank-related officials and Mr. Sundquist's suicide attempt after the couple discussed their frustrations over the house.

The request this week to drop the lawsuit still needs approval from Judge Klein, who agreed to discuss the settlement at a Sept. 12 hearing.

"Their physical and emotional health deteriorates each day they are forced to endure the uncertainty of an outcome that will enable them to repair their lives and the lives of their children," their lawyer wrote in the request. "They do not have the ability to participate in further litigation and appeals without grave costs to their health and quality of life."

The settlement would enable the bank to avoid paying a court-ordered $40 million donation to five law schools associated with the University of California system and two consumer advocacy nonprofits, the National Consumer Law Center and the National Consumer Bankruptcy Rights Center. It's not clear whether the groups will receive any money from the confidential settlement.

A Bank of America spokesman declined to comment Thursday. Lawyers who represented the law schools and the nonprofits in the case did not respond to requests for comment.

At the time of the ruling, legal experts praised Judge Klein's mandatory donation, saying it could help other judges who struggle with how to issue a damages award large enough to make a corporate giant stop bad behavior but not to overcompensate plaintiffs. Outsize legal awards can often trigger an appeal for excessive damages.

In the ruling, Judge Klein said the fine was meant to be large enough that it wouldn't "be laughed off in the boardroom as petty cash or 'chump change.'"

In Tuesday's request, the Sundquists said they "support the court's message to the bank" but worried about what could happen to the damages amount during the appeals process.

"They also recognize that the court's intentions could backfire if an appellate court reduced the financial cost of the bank's stay violations, " their lawyer said in court papers.

Link

The details can be read in the lengthy court opinion here.

And their lawyers will get $5.85M of the 6, I'm sure.

Justice Served.

quote:

The settlement would enable the bank to avoid paying a court-ordered $40 million donation to five law schools associated with the University of California system and two consumer advocacy nonprofits, the National Consumer Law Center and the National Consumer Bankruptcy Rights Center. It's not clear whether the groups will receive any money from the confidential settlement. They'd better not. (me)

That isn't right either. Any payout should go to the people actually harmed.

The discouraging thing is that BofA has dozens, if not hundreds, of these suits going on and has been whacked repeatedly by various regulators for the same silly antics, paid fines and fees in staggering amounts.

I did foreclosures in Whackyland for most of my career as a trustee. It can be tricky, especially with new rules, but I can’t see any excuse for the level of seeming incompetence BofA is displaying. To borrow a line from Casey Stengel, “doesn’t anybody there know how to play this game?”

Yet, if it is doing this intentionally, I can’t see what the motive eould be. It can’t be lucrative, with all the costs incurred, especially in a down market like they went through.

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Originally posted by egregore:

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The settlement would enable the bank to avoid paying a court-ordered $40 million donation to five law schools associated with the University of California system and two consumer advocacy nonprofits, the National Consumer Law Center and the National Consumer Bankruptcy Rights Center. It's not clear whether the groups will receive any money from the confidential settlement. They'd better not. (me)

That isn't right either. Any payout should go to the people actually harmed.

Also it allows the courts/government to pick and choose their favorite "charities". The DOJ loved this crap under Obozo. Can you imagine the hue and cry if the Sessions DOJ directed companies to make donations to Tea Party groups?

Well, no worries. The way it settled, nobody gets anything under the ruling other than the Plaintiffs.

This is common with banks. You fight them tooth and nail, finally are awarded significant damages and face the prospect of “what I have in my hand, or what is behind door 3.”

Not to diminish the banks asshattery in the ensuing events but this all started with the homeowners not paying the loan per the agreement. The rules said they couldn't get a loan modification if they were current on the loan so they stopped paying. Soooo, in order to take advantage of the .gov mandated free shit (loan modification, partial forgiveness, etc...) they purposely defaulted on the contract they signed and set all of this motion.

quote:

Originally posted by TXJIM:
Not to diminish the banks asshattery in the ensuing events but this all started with the homeowners not paying the loan per the agreement. The rules said they couldn't get a loan modification if they were current on the loan so they stopped paying. Soooo, in order to take advantage of the .gov mandated free shit (loan modification, partial forgiveness, etc...) they purposely defaulted on the contract they signed and set all of this motion.

Corporations default on loans all the time and no one considers that a moral failing.

quote:

Originally posted by TXJIM:
Not to diminish the banks asshattery in the ensuing events but this all started with the homeowners not paying the loan per the agreement. The rules said they couldn't get a loan modification if they were current on the loan so they stopped paying. Soooo, in order to take advantage of the .gov mandated free shit (loan modification, partial forgiveness, etc...) they purposely defaulted on the contract they signed and set all of this motion.

Not sure I find them in the wrong here.

We have not had a home loan in some 30 years, so am not all that familiar with "regulations".

However, seems to me that BoA's long history of shenanigans would indicate that all they (the homeowners) did was to take advantage of the "regulations".

My reaction would been more along the line of get a new mortgage from a reputable finance organization and pay BoA off.

All this shit from BoA tells me is that if we should ever have to take a home mortgage that it will, under no conditions, be with BoA.

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Corporations default on loans all the time and no one considers that a moral failing.

I do. Not doing what you said you where going to do, as a corporation or an individual, is failing your contract/agreement.

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Originally posted by Fenris:

quote:

Originally posted by TXJIM:
Not to diminish the banks asshattery in the ensuing events but this all started with the homeowners not paying the loan per the agreement. The rules said they couldn't get a loan modification if they were current on the loan so they stopped paying. Soooo, in order to take advantage of the .gov mandated free shit (loan modification, partial forgiveness, etc...) they purposely defaulted on the contract they signed and set all of this motion.

Corporations default on loans all the time and no one considers that a moral failing.

There are a million ways to justify not doing what is right, the easiest is to point fingers at someone else. I got caught up in the same over exuberant market these folks did. I bought a huge house on the west coast with a hybrid mortgage in 2006, at the top of the market. When the market turned down I was $250k upside down in the house and stairing down a mortgage payment that was due to increase. You know who put me in that position? Me, and me alone. Could I have stopped paying and sought a bailout from one of the many .gov programs, sure. Could I have taken a "strategic default", mailed in the keys and walked away hanging the bank with my problems, absolutly....lots of people did it. I am proud to say that I did none of that. I moved out, rented the home out, payed every mortgage payment on time until the market recovered to the point that I could sell it without shorting the loan.

When I see shit like, "we stopped paying the loan to force the bank to renegotiate the terms", I see someone who failed and tried to force someone else to take responsibility. I lose sympathy for them real fast.....

It doesn’t have to be seen in moral terms, we can just call it “business”. They still chose to stop paying in accordance with the contract they signed. That has ramifications and “loan modification” is not something written into any mortgage agreement.

They rolled the dice, and the bank acted like ass hats.

When you see nearly everyone you know doing loan mods, to lower the amount owed, the interest rate, the payments, etc., the lure to do likewise and not be the only sucker overpaying for your biggest asset must be overwhelming.

It is hard to find fault with those who did so, especially when urged to do so by the banks, incentivized to do so.

In any event, for BofA to have handled the foreclosure process as described is appalling, inexcusable. It isn’t alone in horror stories like this. I participated in a case perhaps not quite as dramatic but equally despicable against one of the other great big banks. Incompetent malevolence can’t suffice to describe it.

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Originally posted by TXJIM:
Not to diminish the banks asshattery in the ensuing events but this all started with the homeowners not paying the loan per the agreement. The rules said they couldn't get a loan modification if they were current on the loan so they stopped paying. Soooo, in order to take advantage of the .gov mandated free shit (loan modification, partial forgiveness, etc...) they purposely defaulted on the contract they signed and set all of this motion.

You may be correct, however we were not told here if there were other reasonable explanations of why they stopped. It may be they had an income change, savings ran out, or sudden expense which caused them to ask in the first place.

Not arguing that BOA's actions were bad but it must have been hard for them not to screw people when all the banks were doing it. They didn't want to be the only suckers not screwing people who intentionally quit paying their mortgage.....

quote:

Originally posted by TXJIM:
Not arguing that BOA's actions were bad but it must have been hard for them not to screw people when all the banks were doing it. They didn't want to be the only suckers not screwing people who intentionally quit paying their mortgage.....

Don’t be silly.

Several years ago I tried to do business with BoA in Tucson. I switch over several thousand dollars from my Pa Credit Union to open a new BoA account, locally. I made the correct deposits to avoid any maintenance charges, as per their own rules in writing.

Problem began with they started charging me monthly maintenance fees, then, a few months later, changed the rules to better suit them. They wanted double the amount in the accounts.

After five months I had enough and told BoA branch manager I wanted a wire transfer of my monies back to Pa Credit Union. He refused.

I ended up phoning a BoA district manager who ordered the money transfer.

That was the last day I walked into a BoA bank branch.

BoA got hammered by the courts? GOOD. Bastards deserved it.

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Originally posted by preten2b:

quote:

Originally posted by TXJIM:
Not to diminish the banks asshattery in the ensuing events but this all started with the homeowners not paying the loan per the agreement. The rules said they couldn't get a loan modification if they were current on the loan so they stopped paying. Soooo, in order to take advantage of the .gov mandated free shit (loan modification, partial forgiveness, etc...) they purposely defaulted on the contract they signed and set all of this motion.

You may be correct, however we were not told here if there were other reasonable explanations of why they stopped. It may be they had an income change, savings ran out, or sudden expense which caused them to ask in the first place.

"The couple had stopped making mortgage payments in March 2009 after Bank of America officials said they wouldn't consider loan modifications for customers who were current on payments."

Sounds like they were capable of making the payment right up to the poin that BOA told them they had to miss payment to be eligible for the .gov forced renegotiation. These programs had that catch as they were intended to help people already in trouble, not just those who wanted a better deal than they had negotiated.

Regardless, still not an excuse. My income went down in this time period as well. When I couldn't afford the mortgage I signed up for I moved out and rented the house to someone who could and kept fighting to meet my obligations. No one forced people to buy more house than they could afford. No one forced people to borrow against the equity in their homes to fund lifestyles they couldn't afford. The .gov stepping in to rescue people from themselves was pure and simple welfare. Taking tax money from some to bail out others who got themselves into the position they were in or forcing the banks to eat principle and interest on the loans.

quote:

Originally posted by JALLEN:

quote:

Originally posted by TXJIM:
Not arguing that BOA's actions were bad but it must have been hard for them not to screw people when all the banks were doing it. They didn't want to be the only suckers not screwing people who intentionally quit paying their mortgage.....

Don’t be silly.

Both sides acted in bad faith, do you want to split the hairs?

I don't know which is worse: BofA, or Wells Fargo. They can both go scratch under, AFAIC.