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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
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
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
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179 thoughts onBank of America FHA-Insured Loan Class Action Settlement
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.
How do I put our name on this list?
I’ve had so many problems to even put in a comment. I can tell you we went through total hell they put me through the ringer with a modification it took 2 years and it still wasn’t right we ended up fileing BK to keep our home they still showing us behind and it will be over in October. Just to find out for some reason we owe a balance to FHA. They sold our mortgage out last year which we were not made aware of. We still have a 7.25 interested rate and can’t refi due to credit. It’s maddening.
How do I become part of this lawsuit that I just learned about? BOA has stuck a knife in my back in such a way with my FHA loan that nobody will help me remortgage.
I lost my job do to a injury that happened on the job, Bofa said they had all these different programs to help there customers when they have circumstances which makes it hard for you to make your mortgage payment. Me and my husband talked to different representatives about helping us with getting a modification to lower our mortgage, we sent in all the paperwork they asked for, but when I would check back with the representative and they would say they didn’t have all the paperwork I faxed it, FedEx it after weeks past and numerous calls, they sent a contract for the modification agreement after reading the contract, the contract state’s the modification was approved but when we looked at the amount, our mortgage was raised almost $200 more than what it was before this happened each time I would call and speak with a representative they tell us our mortgage went up because of our slow credit and debits. This doesn’t make sense if I am having a financial crisis why would they go up on our mortgage this happened on 3 different modifications I kept trying to get Bofa to help us but they wouldn’t help us, I ended up having 3 back surgeries from the injury at my job my husband was the only one working, needless to say after living in our house for 16 years we lost it. If Bofa would have just helped us, we would be in our home we were buying to leave to our children and now we have nothing. Thanks Bofa for the disappointment.
I had a boa mortgage, asked to modify which they agreed upon. Made my first payment they sent it back and suddenly denied my modification. This caused me no only to loose my home but the stress that came from it also cost me my 25 year marriage. Good job BOA you people are horrible and I don’t know how you sleep at night.
Bank of Scumbag’s business is foreclosure, period. We hired attorneys, that said the last communication for these goniffs was: Bank of America refuses to cooperate. We lost 10 years of payments, $25 k down payment, and our home. Thanks, Countrywide, and Bank of Scumbag. Hard to to pay the mortgage when its never the SAME every month. Website, email, phone, snail mail were all DIFFERENT amounts. So you could NEVER be right. Thanks, for nothing.
We had the same thing happen to us .
I did a make your home more affordable loan HARP loan through Bank of America and they told me to make my payments late because I made too much money to qualify and that then they could get me qualified would show me qualified this ruin my credit for life…. Kathy
I have been fighting Bank of America for 9 years with an attorney. They returned my payment for no reason in 2008. The courts found Bank of America in breach of contract January 27,2017. I have boxes of documents to prove everything from the beginning. Denied modification 8 times along with Hamp and save the dream. I have spent thousands of dollars on attorneys to help me getting nothing accomplished. All of this has caused me extreme mental duress.
I am a real estate broker doing short sale on Countrywide loans sold to BofA. BofA said they would approve the short sale as homeowners suffered medical issues. After being lied to for months and months on the last couple of days before the redemption period expired BofA said the “investor” Trust for Bank of New York Mellon would not approve the short sale and foreclosed. BNYM could not have been the investor because BofA bought a non-performing loan. The agreed upon purchase price was 300,000. I helped the buyer obtain the home on an auction site for 300K plus 15,000 fee to the auction company. The purchase price BofA agreed to was 312,000. BofA bought the home back at the court house on auction day for 397K. The homeowner bought the house in 2002 for 345K with a 35K downpayment with a 310K mortgage and were making payments for 10+ years. After many calls to BofA through the shortsale process and a denial after they said it was approved it was rejected. I received a call from the Escalation dept. asking me if they even owned the loan.
This bank is as corrupt as they come as far as Im concerned. I spent 9 months working with BofA on this loan. They run the fees up for the obligator so it is impossible to redeem the mortgage.