Friday, March 25, 2011

Arizona AG Thwarts BofAs Attempt To Move State's Lawsuit To Federal Court; Action Alleges Deceptive Practices In Processing Loan Modifications

In Phoenix, Arizona, The Arizona Republic reports:
  • The Arizona attorney general's lawsuit against Bank of America over alleged mortgage fraud will remain in state court. The lender had asked the case, filed in late December, be moved to federal court. State Attorney General Tom Horne, who inherited the lawsuit from former Attorney General Terry Goddard, said state-court cases often move more quickly then those tried in federal court.

  • "Homeowners who have suffered from practices that may violate the Arizona Consumer Fraud Act need timely relief," he said. "And unnecessary delays can be damaging to them."

  • The suit alleges BofA deceived borrowers who were trying to obtain loan modifications to keep their homes. The lender is accused of violating the state's consumer-fraud laws by not responding to many homeowners' requests for help, rejecting loan-modification applications without supplying sufficient reason and beginning foreclosure proceedings on homeowners at the same time those borrowers were starting loan modifications.

  • The lawsuit was filed after a one-year investigation into the loan servicing and foreclosures practices of the Charlotte, N.C.-based lender, Arizona's largest mortgage holder and servicer.

For the story, see BofA lawsuit to stay in state court (AG says switch to federal level would slow its case over bank's mortgage practices).

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