Bank of America Unlawfully Services Home Loans, Deceiving and Costing Consumers, Class Action Lawsuit Claims

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Bank of America is “misleading, deceptive, and unfair” in the servicing of its home loans, fraudulently charging consumers unnecessary insurance and inspection fees, a new class action lawsuit alleges.

The nationwide class action lawsuit was filed in Florida on May 7 by lead Plaintiff Kimberly Sullivan, who says that Bank of America (BOA) deceptively charged her for unnecessary and even fake property inspections, and forced her into excessive insurance policies.

Sullivan’s home has a mortgage loan serviced by Bank of America, which is also the lender and debt collector on the loan. When Sullivan took the title of the Palm Beach County home in 2012, she tried to contact BOA to pay off the mortgage, according to the lawsuit.

However, despite Sullivan’s repeated efforts to contact the bank, BOA filed foreclosure proceedings against the original owner in 2018.

“Notwithstanding knowing for months that Sullivan had purchased title to the property and was in fact attempting to contact BOA and attempt to resolve the mortgage debt/delinquency, BOA specifically choose to not name Sullivan as a defendant even though she was an indispensable party to BOA’s foreclosure claim under well-settled Florida law,” the claim states.

The courts forced BOA to amend the complaint to include Sullivan, and in April 2018 Sullivan made a written offer to BOA for $500,000 to satisfy what was owed, according to the class action lawsuit.

“It was not until March 2019 – almost seven years after Sullivan bought the Property and after six years of expressly refusing to acknowledge Sullivan’s interest in the Property or to otherwise confer with her – that BOA finally acknowledged Sullivan as the lawful successor in interest under the Mortgage in a written communication dated March 21, 2019,” the class action lawsuit claims.

Thereafter, BOA sent her communications concerning the property, including records reflecting the amount and nature of the property inspections and other charges being added to balance of the loan.

According to the claim, Sullivan suspected BOA’s reports of inspection were not only unnecessarily high, but many were false. “While BOA attempted to withhold the requested information from Sullivan, she ultimately prevailed in obtaining the relevant property inspection records from BOA, which confirmed Sullivan’s suspicions regarding the fraudulent nature of the supposed property inspection fees.”

“More specifically, BOA’s own records establish that BOA and Safeguard fraudulently charged for property inspections that were never performed.”

Between 2010 and 2019, BOA said it had done 100 drive-by property inspections of Sullivan’s home, which Sullivan was charged for, states the claim. However, in 57 of these inspections the reports submitted reflect that the inspector could not gain access because the property was located in a gated community and the inspector was denied access by the guard. 

“BOA services home loans according to uniform practices designed to maximize fees assessed on borrowers’ accounts when they are behind on their payments,” the class action lawsuit claims.

“Consistent with these practices, BOA uses an automated default servicing platform to illegally, unfairly, and fraudulently charge defaulted or at-risk-of-default borrowers for multiple and repetitive “property inspections” that are not required by lenders, not permitted by lender guidelines, and in many cases not allowed under state and federal regulations and guidelines.”

Sullivan is also seeking redress for alleged “unnecessary expenses and/or unprovided services, which are in some cases outright fraudulent and in all cases excessive, deceptive, and otherwise unfair,” including for forcing places insurance.

According to the class action lawsuit, BOA is able to get away with predatory loan servicing as it knows it will be reimbursed by Fannie Mae/Freddie Mac if homes go into foreclosure – meaning it makes revenue off the fees it charges and foreclosure proceedings.

“Defendants’ schemes take advantage of the current structure of the mortgage industry,” the claim states.

Sullivan wants to represent anyone in the U.S. who was charged property inspection fees through BOA’s automated loan servicing platform. She is suing for breach of contract, good faith laws, state consumer, lending and trade acts, and unjust enrichment.

Sullivan is seeking certification of the Class, damages, injunctive relief, restitution, interest, legal fees, and a jury trial.

Bank of America is also facing another class action lawsuit for allegedly making a “dishonest dollar” off of account holders by charging deceptive transfer fees. Consumers claim BOA preys on their lack of knowledge about how money transfers work and hits them with deceptive fees amounting to as much as $10 each, according to the class action lawsuit. 

Do you have a home loan serviced by Bank of America? Have you faced any fees you thought were unfair? Let us know in the comments section!

Sullivan is represented by Scott David Hirsch of Scott Hirsch Law Group and Daniel E. Gustafson, Daniel C. Hedlund, and David A. Goodwin of Gustafson Gluek PLLC.The Bank of America Deceptive Home Loan Servicing Class Action Lawsuit is Sullivan v. Bank of America, N.A. et al., Case No. 9:21-cv-80828-WPD, in the U.S. District Court Southern District of Florida. 

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