Suit: BofA Pocketed Entire $60K Insurance Cash From 'Ike-Damage' Claim To Cover $24K Foreclosure Deficiency; Refuses To Refund Balance To Homeowner

In Galveston, Texas, The Southeast Texas Record reports:

• Ross Durant and Ilva Lucia Rodriguez of La Porte seek approximately $36,000 from Bank of America after their settlement check from the Texas Windstorm Insurance Association ["TWIA"] was used to cover costs generated by the foreclosure sale of their Galveston County property.

• Durant and Rodriguez argue that Bank of America foreclosed their Hurricane Ike-damaged residence in Santa Fe and took their settlement funds without providing a refund, a lawsuit filed Jan. 12 in Galveston County District Court says.

• According to the original complaint, the plaintiffs received a check in the amount of $60,000 from TWIA as a result of their lawsuit against the insurer. Bank of America acquired their mortgage from Countrywide Mortgage and seized the dwelling when Durant and Rodriguez fell behind on their payments, the original petition says. The place was sold at foreclosure for $205,000. The balance owed on the mortgage at the time was $228,627, resulting in a deficiency of $23,627.

• "Because of the mortgage, the settlement check from the Texas Windstorm Insurance Association named both plaintiffs and Countrywide Mortgage as a payee," the suit says. Anthony Gunn, the complainants' original attorney, forwarded the check with their signatures to the defendant with a request that they receive the balance of the settlement less the deficiency, or an amount claimed of $36,373.

• "The defendant has failed and refused to refund that balance," the suit says. "That refusal to refund the difference is a breach of contract."

Source: La Porte couple sues to recover settlement funds.