BofA to pay $20M foreclosure settlement
A division of Bank of America Corp. will pay $20 million to settle a lawsuit that accused it of wrongfully foreclosing on 160 service members by not checking on their military status.
The U.S. Department of Justice filed the suit against BAC Home Loans Servicing, formerly known as Countrywide Home Loans Servicing. The complaint alleged that Countrywide did not consistently check the military status of borrowers on whom it foreclosed through at least May 31, 2009.
The suit was filed in the Central District of California, where Countrywide was based. Charlotte-based BofA (NYSE:BAC) bought Countrywide in 2008.
The Justice Department alleged that Countrywide foreclosed on the 160 servicemen in many instances when it knew, or should have known, about their military status, the department says. The victims include individuals who have served in Iraq and Afghanistan.
The Servicemembers Civil Relief Act protects military personnel on active duty from some civil obligations such as outstanding credit-card debt, mortgage payments, pending trials and taxes.
"The men and women who serve our nation in the armed forces deserve, at the very least, to know that they will not have their homes taken from them wrongfully while they are bravely putting their lives on the line on behalf of their country," says Thomas Perez, assistant attorney general for the Justice Department's civil rights division.
BAC Home Loans Servicing will establish a settlement fund of $20 million to compensate the military personnel Countrywide foreclosed on between Jan. 1, 2006, and May 31, 2009. In addition, the BofA unit has agreed to compensate any eligible service members it wrongfully foreclosed on between June 1, 2009, and Dec. 31, 2010.
Article shared by Phoenix Business Journal - Date: Monday, May 30, 2011, 2:38am MST