A federal judge has granted final approval to a class action lawsuit settlement over allegations that Bank of America failed to report to the Internal Revenue Service over $1.5 billion in mortgage interest that had actually been paid by mortgage holders. As a result, Class Members overpaid their taxes and will receive compensation of at least $40 from the Bank of America class action settlement.
Class Members of the Bank of America mortgage interest settlement include all U.S. consumers who made payments of deferred interest on their option adjustable rate mortgage (“option ARM”) with Bank of America, N.A. in 2009, 2010, 2011, 2012, or 2013. Class Members can participate in the class action settlement even if they no longer own the property that had the option ARM mortgage.
At least $40. The Bank of America class action settlement will provide the following compensation to Class Members:
- If you made payments of deferred interest in tax year 2009, the class action settlement provides you with 75 percent of the approximate tax deduction value of your payments of deferred interest during the year. Monetary compensation is provided because the time period for filing amended income tax returns for 2009 has expired. To receive this payment, you must submit a timely Claim Form showing that you qualify for the payment.
- If you made payments of deferred interest in tax years 2010, 2011, or 2012, the class action settlement provides you with amended Forms 1098 reporting your payments of deferred interest in those years. In addition, for each amended Form 1098 you receive, you will receive $40 to help defray tax preparation costs associated with amending your tax returns to claim deductions for the previously unreported payments of deferred interest. You do not need to do anything to receive these benefits under the Settlement. It is anticipated that you will receive your amended Forms 1098 by March 15, 2014, and will receive your $40 payment per each amended Form 1098 within 31 calendar days after the deadline for submitting Claim Forms expires or after the settlement becomes effective, whichever is later.
- If you made payments of deferred interest in tax year 2013, the Bank of America class action settlement requires the bank to report on Form 1098 for tax year 2013 your payments of deferred interest for the year.
Proof of Purchase
Claim Form Deadline
Richard Horn v. Bank of America NA, Case No. 12-cv-01718, U.S. District Court, Southern District of California.
The Bank of America class action lawsuit accuses the bank of not reporting over $1.5 billion in mortgage interest paid by option ARM customers to the Internal Revenue service for tax years 2009, 2010, 2011, and 2012. As a result, plaintiffs allege this caused them and other option ARM borrowers to overpay their taxes, as they did not claim a mortgage interest deduction for their payments of deferred interest in those years.
According to the class action settlement notice:
“As you may recall, your ARM allows borrowers to make a monthly ‘minimum payment’ that was often less than the interest that was actually owed in a particular month. The portion of the interest that you did not pay in those months is called “deferred interest.” According to Bank of America’s records, you eventually paid all or a portion of that “deferred interest” in 2009, 2010, 2011, 2012, or 2013. You may have done so, for example, when you sold or refinanced your house, or when you made a payment in a given month on your option ARM that was in excess of the interest owed for that month.”
Bank of America denies any wrongdoing but has agreed to a class action lawsuit settlement to resolve the litigation. The Bank of America mortgage settlement was approved on April 11, 2014.
P.O. Box 35113
Seattle, Washington 98124-5113
Phone: (877) 899-4117.
David J. Vendler, Esq.
Morris, Polich & Purdy LLP
Michael R. Brown, Esq.
Michael R. Brown, APC
Jeffrey D. Poindexter, Esq.
Law Office of Jeffrey D. Poindexter
Peter B. Morrison, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
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Categorized in: Closed Settlements