Saturday, March 26, 2011

BofA lawsuit to stay in state court

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.

In 2010, nearly 500 consumers filed complaints against BofA. Nevada's attorney general filed a similar lawsuit against the bank on Friday.

BofA has described the filing of the lawsuits as hasty.

by Catherine Reagor The Arizona Republic Mar. 22, 2011 04:42 PM

BofA lawsuit to stay in state court

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