Bank of America fined $45 million for Abusive Foreclosure

A bankruptcy judge issued a $45 million fine against Bank of America Corp. , calling the bank’s treatment of a California couple who fought to save their home “brazen” and “heartless” and should have added the words “illegal”, “fraudulent” and “unconscionable”.

Judge Christopher Klein of the U.S. Bankruptcy Court in Sacramento said the bank’s mortgage modification process and mistaken foreclosure on Erik and Renee Sundquist’s home left them in “a state of battle-fatigued demoralization.”

The case brings renewed attention to the mortgage industry’s loan servicing business. Klein alluded to systemic problems, saying the bank had little incentive to alter the mortgage terms and “kill a goose that keeps laying 6% golden eggs,” referring to the interest rate that the bank collected.

 

 

The fine money, earmarked mostly for law schools and consumer advocacy organizations, is meant to be large enough that it won’t “be laughed off in the boardroom as petty cash or ‘chump change,’” Klein said in the ruling, published Thursday. “It is apparent that the engine of Bank of America’s problem in this case is one of corporate culture…not rogue employees betraying an upstanding employer,” he added.

An expanded version of this report appears on WSJ.com.

To read the entire opinion go here: sundquist-opinion

Tags: Bankruptcy fraud, foreclosure fraud, Sundquist v Bank of America
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