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Judge’s $45 Million Bank of America Fine No Laughing Matter

In an incredible Wrongful Mortgage Foreclosure case, California bankruptcy Judge Christopher Klein was so appalled by Bank of America’s (BOA’s) willful disregard for US foreclosure law and for its own customers, that he levied a $45 million punitive damages judgment, with $40 million earmarked for law schools. Judge Klein admitted the amount was derived partly in hopes the fine is large enough that the BOA board would not simply laugh at it, treating it as a cost of doing business their way.

In a 107-page ruling, the California judge referred to the “Kafkaesque Nightmare” and to the “denial and cover-up” behavior “reminiscent of Watergate”.

The homeowners’ mortgage hardship began back in 2008, when Erik Sundquist’s construction business fizzled in the recession. Understanding that they needed to downsize, the Sundquists sold their home in Lincoln, California and bought a home, financed through Countrywide, at half their prior mortgage. After putting down $125,000, the Sundquists obtained a 6 percent interest rate, $587,250.00 mortgage through Countrywide. The interest rate and resulting payment were higher than the Sundquists were comfortable with, but they were under threat of losing the home to a cash buyer, if they didn’t sign immediately. Still struggling financially, in 2009, homeowners Erik and Renee Sundquist sought a loan modification for the house in Sacramento California. According to Renee Sundquist’s testimony in the case, Bank of America, who had taken over their loan through acquisition of Countrywide, told the Sundquists that they needed to miss 3 payments to qualify for a loan modification. Their first request for modification assistance was mailed in as directed by a BOA representative. BOA, despite USPS tracking that named a signed recipient, denied ever receiving the mailed package. In fact, BOA denied receipt of documents over and over in the early stages of the making home affordable program. Thus, began a multi-year nightmarish cat and mouse game with the Sundquist family.

Renee Sundquist began journaling as a way to cope with the insanity. Her journal offered a great timeline and a horrific, yet credible insight into the actions taken by BOA as BOA proceeded with the mortgage foreclosure even as negotiating a modification. There were twenty modification requests for Mortgage Assistance submitted, each one required by Bank of America. In 2010, in an attempt to save their home and financial well being, Erik and Renee filed a bankruptcy. Bank of America ignored the bankruptcy mandatory Stay of foreclosure and sold the home, despite file notes which included references to the chapter 13 bankruptcy. Bank of America protested that it received the stay notice 3 days after filing, and after the sale occurred, but BOA still proceeded to evict the homeowners, by issuing a 3-day notice on the Sundquist’s doorstep.

Believing themselves evicted, and with no notice of other actions, the Sundquists obtained a rental unit at a cost of $4000 a month and thought it was over. Meanwhile BOA claims to have stopped the eviction process, despite having agents frequently checking on the home. In fact, the home was looted while the Sundquists lived in the rental unit.

The saga is amazing, and you can access a copy of Judge Klein’s ruling here Sundquist vs. BOA. The amount of the Bank of America fine is not just to act as compensation for the losses, pain and suffering that Sundquists experienced at the hands of BOA, but also, so Bank of America would take seriously the harm they caused by flouting regulations and acting with misfeasance, at best, and malfeasance, at worst.

It was a long, painful process for the Sundquist family, but in the end, after 20 attempts to work out a resolution, a multiyear journal of the process, and countless resubmission of lost paperwork, that a judge ruled for them in the end. And it took suing their lender to finally put to bed the whole experience. As Renee Sundquist wrote in her journal, “they could forget (but not forgive) Bank of America’s loan modification run-around…”

Do you have a lender saga to share? Let us know. Maybe an attorney can help you find relief too.

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