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B of A Trading Modifications for Lawsuits

Fri Aug 19, 2011 by on Florida Law News

Good news for underwater homeowners? Possibly.

Relaxed modification rules are one way to ensure you stay in your home at a price you will be able to afford.

Bank of America is reportedly negotiating with both federal and state governments over limiting the legal liability it took on when it purchased Countrywide in 2008. When Bank of America bought Countrywide, it stepped right into the middle of the subprime mortgage mess and also the foreclosure document mill scandal. Now B of A is facing lawsuits from investors and federal and state governments.

B of A wants to reduce the amount it will have to payout to settle the consumer claims with the 50 states by offering loan modifications on a large scale. The proposal is gaining traction with some of the attorney generals, but both sides are concerned that a potential deal will create a moral hazard by encouraging people to put themselves into a worse financial position than they currently are.

If B of A settles, it will be able to put some of the legal liability it inherited when it bought Countrywide behind it and move on. By doing modifications, the Bank can also lessen such costs because the Bank will be able to settle the lawsuit for less money.

If the modification idea does make it into a settlement, it could open the door to relaxed rules and maybe even principal reductions, something almost unheard of in the current climate.

Bank of America also doesn’t want a protracted fight with the government such a fight will turn out to be a PR nightmare. It is in B of A’s interest to get the entire crisis wrapped up and over with.

What does this mean for the homeowner?

The idea also benefits homeowners as well. It is good to see that someone in government is finally fighting for the little guy. The relaxed modification rules can ensure that you stay in your home at a price you will be able to afford. Above all, they can help you avoid defaults and the threat of deficiency judgments.

Oppenheim Law is cautiously optimistic. Banks want to limit the amount that they will have to pay out and are willing to throw red meat to the 50 State Attorney Generals. That could be very good news for you, the underwater homeowner.

Tags: Bank of America, Countrywide Financial

7 responses to “B of A Trading Modifications for Lawsuits”

  1. […] South Florida Law Blog Filed Under: Foreclosure Law News, Foreclosure News Tagged With: Florida, foreclosure, fraud, […]

  2. Unfrigginbelievable123 says:

    About 2 weeks ago BOA got sued for 10 Billion by AIG. One week ago they sold 73 Billion in bad mortgages to the government for 500 million, making the tax payers the new holder of the bogus debt (we fund Fannie Mae) and giving BOA a backdoor bailout. That has to be illegal, if not treasonous. Now they are seeking a settlement to modify loans in lieu of what? I’m sick of this crap. Wachovia got caught laundering $350 Billion for the Mexican drug cartels and they just changed their name and… time to go for a soda and nobody cares? Now they are Wells Fargo and nobody goes to jail for laundering cash for the evil decapitators extraordinaire? Have we lost all sense of morality and now live in a completely depraved world? Obama and the congress are out on vacation? Not that it matters, because now we have a “supercongress” of 12 banker-bought pukes and the president as the head honcho making all fiscal decisions? What do we need a congress for then? Heck, why do we need a constitution then? Absolutely ridiculous. This is Bizarro World!

  3. Wilcox81 says:

    I am a homeowner in Fort Lauderdale who has a 60% underwater mortgage with Bank of America.  I have contacted them two times over the past 6 months and they will do nothing to work with me.  I am sixty years old and have resigned myself to believe that I will now work until my death for this house.  My wife (hairdresser) is unemployed since very few want to hire the elderly.  I am draining my limited savings monthly.  But, as BOA stated, since I have more then 25k combined in savings and an IRA, I don’t qualify for assistance.  My original note was with Countrywide who later sold it to BOA.  I need a good lawyer.  Any help? 

  4. Westin Fort says:

    Westin Fort Lauderdale…

    […]Loan Modifications Good News For Underwater Homeowners | South Florida Law Blog[…]…

  5. Sameo22 says:

    I would like to join the lawsuit, if you have a phone number please email me.

    sameo22@hotmail.com

  6. Sam says:

    I would like to join the lawsuit if you have a phone number please email me.
    Thank You, 
    Sam

  7. […] Bank of America in like manner doesn’t be in need of a protracted contend through the regulation of that kind draw the sword wish accomplish to have ~ing a PR incubus. It is in B of A’s weal to have the unalloyed conjuncture wrapped up and more than by. Persevere prelection→ […]