Bank of America FHA-Insured Loan Class Action Settlement

Bank of America NA has agreed to pay $29 million to settle a class action lawsuit alleging it breached promissory notes underlying certain FHA-insured home loans in violation of Federal Housing Administration regulations.

If you prepaid an FHA-insured loan with Bank of America on a day other than the first of the month, you may be entitled to a cash payment from the class action settlement.

On Mar. 31, 2016, plaintiff Veronica Dorado filed the class action lawsuit against Bank of America, alleging the bank breached the promissory notes underlying FHA-insured home loans by collecting post-payment interest without providing an FHA-approved payoff disclosure to borrowers who made a pre-payment inquiry, request for payoff figures, or tender of prepayment.

Post-payment interest is the interest collected by a lender after the borrow has paid the full principal of the loan. According to the Bank of America class action lawsuit, lenders may collect post-payment interest for the remainder of the month in which full payment is made, but only to the extent permitted by FHA regulations.

“Defendant Bank of America, N.A. has a systematic practice of collecting ‘post-payment’ interest on loans insured by the Federal Housing Administration without first complying with the uniform provisions of the promissory notes and the FHA regulations governing these loans,” Dorado alleges in the BofA class action lawsuit.

“As a result, Bank of America has collected hundreds of millions of dollars in post-payment interest in an unlawful manner,” the class action lawsuit asserts.

Bank of America denies the allegations but agreed to settle the FHA-insured loan class action lawsuit to avoid the expense and uncertainty of ongoing litigation. The class action settlement was preliminarily approved on Dec. 7, 2016.

Class Members who would like to opt out of or object to the BofA settlement must do so no later than Feb. 6, 2017.

Who’s Eligible

Class Members of the BofA settlement include: “Any person who had a FHA-insured loan for which (i) the loan was originated between June 1, 1996 and January 20, 2015; (ii) one of the Releasees (as defined in the Settlement Agreement)—as of the date the total amount due on the loan was brought to zero—was the lender, mortgagee, or otherwise held legal title to the note; (iii) one of the Releasees collected interest for any period after the total amount due on the loan was brought to zero (i.e., BANA collected ‘post-payment interest’); and (iv) one of the Releasees collected post-payment interest during the statute of limitations period applicable for the loan.”

Group 1 Class Members include those who, in response to an inquiry, were sent information about post-payment interest on a certain form. Group 2 Class Members include those who were not sent information on the form in response to an inquiry.

Potential Award

Varies, depending on a number of factors, including whether the Class Member belongs to Group 1 or Group 2, and the total number of Class Members who participate in the BofA settlement. Class Members will receive a refund of a percentage of the amount of post-payment interest collected with the paid-off FHA-insured mortgage loan.

Proof of Purchase

N/A

FAQs

FREQUENTLY ASKED QUESTIONS »

Claim Form Deadline

N/A. Class Members who do not opt out of the BofA settlement will automatically receive payment.

Case Name

Dorado v. Bank of America NA, Case No. 1:16-cv-21147-UU, in the U.S. District Court for the Southern District of Florida

Final Hearing

3/23/2017

UPDATE: On March 24, 2017, the Bank of America FHA-Insured Loan class action settlement was granted final approval by the court.  Let Top Class Actions know when you receive a check in the comments section below or on our  Facebook page.

UPDATE 2: On April 19, 2017, an appeal to the Bank of America FHA-Insured Loan settlement was filed.  Claims will not be paid until all appeals are exhausted.  We appreciate your ongoing patience. Top Class Actions will continue to provide updates as we learn more.  

UPDATE 3: On June 5, 2017, the appeal to the Bank of America FHA-Insured Loan settlement was dismissed.  According to the settlement website, payments will occur in the next several months.  Top Class Actions will continue to provide updates as we learn more.  Keep checking back and let us know when you receive a check in the comments section below or on our  Facebook page.

UPDATE 4: On July 14, 2017, the settlement administrator announced that checks were mailed to eligible Class Members. Let us know when you receive a check in the comments section below or on our  Facebook page.

Settlement Website

www.DoradoBANASettlement.com

Claims Administrator

Dorado v. Bank of America
c/o Garden City Group (GCG)
P.O. Box 10340
Dublin, OH 43017-5540
1-866-990-9556

Class Counsel

Steven Rosenwasser
BONDURANT MIXSON & ELMORE LLP

Defense Counsel

Allen Burton
O’MELVENY & MYERS LLP