By Jacob Adelman, Associated Press
LOS ANGELES (AP) — It seemed Maria Campusano's financial problems were behind her when the mortgage on her Victorian home in a Massachusetts mill town was chopped by hundreds of dollars a month.
She soon learned that her troubles had just begun.
Weeks after making her first payment under the new rate, the school district staffer began receiving past-due notices, documents showing wildly inaccurate loan balances and letters threatening foreclosure. She now fears she'll lose her home.
"How can they take away what I have worked so hard for?" Campusano said.
Campusano is one of two named plaintiffs in a proposed class-action lawsuit alleging breach of contract by Bank of America NA and subsidiary BAC Home Loans Servicing LP.
The suit, which was filed in Los Angeles federal court because BAC is located in nearby Calabasas, is among a growing number of legal complaints accusing banks of disregarding what should be binding agreements to reduce the monthly mortgage payments of troubled borrowers.
The suits involve permanent modifications through the U.S. Treasury-administered Home Affordable Modification Program, which offers incentives to loan servicers who extend modifications, as well as so-called proprietary modifications, which banks offer independently of the government guidelines.
They represent a new wave of complaints against banks that have already weathered years of criticism for their reluctance to modify loans and for foreclosing on borrowers after offering them trial modifications.
Some have faced lawsuits alleging that the foreclosures amounted to a violation of the deal they struck with the government when they accepted funds from the $700 billion Wall Street rescue. And earlier this month, U.S. Treasury officials announced it was withholding incentives from Wells Fargo & Co., Bank of America Corp. and JPMorgan Chase & Co. for incorrectly determining that many borrowers were ineligible for HAMP modifications, a claim that the banks denied.
Recently, though, government officials and mortgage lenders have been touting statistics showing an increase in the number of modifications being extended.