The Bankruptcy Court for the Eastern District of California allowed a recover of $1 Million in Actual Damages to a California couple and assessed $45 Million in Punitive Damages against Bank of America in a recent opinion. The Court found that Bank of America had 1) induced the plaintiffs into not paying their mortgage in order to obtain a loan modification; 2) later repeatedly rejected those loan modification attempts citing allegedly incomplete documents; 3) after the plaintiffs filed for bankruptcy in an attempt to save their home from foreclosure, went ahead and foreclosed on the plaintiffs during the bankruptcy; 4) gave the house back to the plaintiffs nine months after the plaintiffs had moved out and after Bank of America had allowed the house to go into disrepair. As you might expect, this was a traumatic experience for the couple, who had journaled the entire miserable experience including her conversations with Bank of America agents and her even considering suicide as a result. Simply stunning.
In assessing the $45 Million, the Judge allowed the debtor to recover $5 Million, gave $10 Million to the National Consumer Law Center, $10 Million to the National Consumer Bankruptcy Rights Center; and $4 Million to each University of California Law School. Wow. It will be interesting to see what the 9th Circuit thinks of this one… I think it’s fairly safe to say that Bank of America will be appealing this one.
While I haven’t seen facts this severe before, we have seen quite a few cases involving improper stays, banks attempting to collect after a stay or a discharge, and even attempts to foreclosure after stay or discharge. There is also quite a bit of litigation regarding systematic bank attempts to avoid HAMP modifications that were required by the TARP bailout in 2009. If you are having similar issues, contact the firm at 919.526.0450, email us at firstname.lastname@example.org, go to our contact page or sign up for our consumer protection mailing list.
Here’s a link to the Court’s (lengthy) opinion.