15 Texas Homeowners Sue Bank of America for Abusive Practices – Don’t Mess With Texas

I’ll tell you what… there are times in life when you’ve just got to love Texas. People in Texas just don’t like getting misled, lied to, pushed around, and generally abused, so it’s not a great place for banks to do what banks do.  But apparently, Bank of America is just as abusive to the homeowners in Texas as they are to the homeowners in the other 49 states, and they’re being treated to a little Texas hospitality as a result.

The Texas Housing Justice League and 15 Texas homeowners have filed suit against Bank of America N.A. and its subsidiary, BAC Home Loans Servicing, alleging abusive servicing practices.  I’m not saying that homeowners in other states aren’t just as upset about being abused by the banks, but it’s the homeowners in Texas that aren’t just complaining, they’ve banded together to file the suit, and I’m guessing that not only is this going to be interesting, but it’s probably only the beginning of these types of actions.

I’ve said it before, I’ve even told bankers before… the banks may have taken an early lead against homeowners in this crisis, and they may think they’re winning, but in this country, if you push people far enough, they’re going to fight back.  And in the long run, Americans have a long history of coming out on top, as in… would you like a torch or a pitchfork?

The lawsuit, filed in US District Court, Southern District of Texas, Victoria Division, describes:

“… a systematic home loan servicing scheme that includes hours of telephone runaround, misleading and inconsistent information, lost correspondence, verbal abuse, and extensive delay, all of which have documented costs not only in terms of money, but in health. The facts in this case reveal the harsh reality that underlies the loan servicer’s press statements about loan modifications and forbearance agreements following collapse of the U.S. housing market.”

Yeah, that sounds about right.  I’d recognize Bank of America anywhere.

I’m no lawyer, but is Bank of America going to dispute these allegations, or just stipulate to them and go from there?  Because I would think even the judge would have to suppress the urge to snicker if the Bank of America lawyer started out by saying the bank didn’t do what the homeowners are alleging.

As in: “It’s not true, your honor.”  HAHAHAHAHAHAHAHA… “Order in the court, this court will come to order.”  Isn’t that about how that would go?

Here are some of the highlights from the complaint:

“Many of the Plaintiffs were told that they were eligible for loan modifications or other workout assistance, only to spend months being shuffled through Defendant BAC’s “Home Retention,” “HOPE”, “Foreclosure,” “Bankruptcy” and “Collections” departments with no resolution.”

Okay, so that’s standard operating procedure at Bank of America, right?  I mean, they probably have a manual that describes that runaround, wouldn’t you think?

“Others simply wanted to know that they had been reviewed accurately for eligibility in any available programs, that a denial of assistance was final, and that their arrearage had been correctly calculated. Instead of providing Plaintiffs with basic information about the servicing of their loans and providing timely screenings for workout assistance, however, Defendant BAC misrepresented material information to the Plaintiffs about their loans, and forced them into a scheme of operation so dysfunctional that the constant barrage of misinformation, misdirection, and deliberate inactivity amounted to abuse and harassment.”

“Plaintiffs describe feeling “harassed,” “like a yo-yo,” and “blocked at every turn.”

Are you loving this as much as I am?  A yo-yo, huh?  I like it… I might have used a different metaphor, but I suppose in court you can’t just say what you’d want to say.

“When Plaintiffs called Defendant BAC the information they received over the telephone often conflicted with written statements or prior telephone conversations. In many of the telephone calls Defendant BAC spun Plaintiffs in a labyrinth of transfers from one department to another and back again. Plaintiffs spent hundreds of hours on the telephone, explaining their stories to a different person each time they called; often they were transferred between departments, knowing they would never speak to the same person again, and wondering if the information being provided would be contradicted by the next person they spoke with. Often, it was.”

Oh my God, I wish I made money at this, because I’d love to be able to go to Texas and watch this case proceed in person.  It’s going to be one for the books, that’s for sure.  I’m thinking there would have to be some stand up and cheer moments.  And I wonder how much trouble I’d get in for throwing rotten tomatoes at Bank of America’s lawyer in the parking lot.  I know, so immature, but guess what?  I know you are, but what am I?

What’s interesting about this case is that they’re using RESPA, the Real Estate Settlement and Procedures Act, as the basis for the complaint.  As in…

RESPA Count: Part A

Plaintiffs each sent Defendant BAC written applications for a loan modification, including a hardship affidavit, and written submissions of financial information that were “qualified written requests” within the meaning of RESPA, in that Plaintiffs sought information about their eligibility for a loan modification or other methods to minimize their losses.

The complaint also describes how special it is to call Bank of America on the phone.

“Requests to speak with supervisors or managers were met with resistance. During the course of telephone calls to Defendant BAC, Plaintiffs often found themselves disconnected after waiting on hold to speak to a supervisor, or were told that no supervisors were available. Some Plaintiffs sought out face-to-face interviews by contacting Bank of America branch offices, but simply found themselves on speakerphones with the same unaccountable departments that had previously been providing them with misinformation by telephone.”

Well, wait a minute… maybe they should have tried communicating with Bank of America in writing, instead of just by phone.  Could be… right?  Maybe they just don’t have good phone skills.

“Written communications did not fare better. Plaintiffs’ written submissions were often lost or misplaced.  Plaintiffs were asked to sign the same documents three, four or even five times, and were asked to provide the same information repeatedly. Many of the Plaintiffs were assigned multiple “negotiators” who would not return telephone calls, or provide timely information to Plaintiffs.”

Oh well, I guess not.  So, maybe Bank of America is hoping that the judge will think that it’s all just an isolated incident, and that it’s not something that happens to everyone.

“Plaintiffs’ experiences are not isolated incidents, but instead reveal a pattern and practice by Defendant BAC of deliberately misinforming borrowers in default or at risk of default, and refusing to respond to Plaintiffs’ legitimate, written and oral requests for information.”

Whoops… I guess that’s not going to be an easy case to make either.  So, what about the damages?


Plaintiffs suffered damages including, but not limited to loss of credit, foreclosure, emotional harm, embarrassment and humiliation.  Plaintiffs’ damages were proximately caused by Defendant BAC’s noncompliance with the requirements of the mortgage servicer provisions of RESPA.

Defendant BAC has engaged in a pattern and practice of non-compliance with the requirements of the mortgage servicer provisions of RESPA, and Plaintiffs seek $1,000 in statutory damages per violation.

Plaintiffs seek attorney fees under 12 U.S.C. § 2605(f)(3).

So, anyway… there’s of course a lot more involved and I’m not going to include it all in this article, or it will be longer than my usual articles, and that would make it REALLY LONG, I realize.  Here are the other Counts listed in the complaint, but I’ll provide a link at the bottom to the actual complaint, so the attorneys reading this can dive right in to the details.  But here’s the overview:

Count Two: Breach of Contract – Loan Modification Agreement

Count Three: Breach of Contract – Forbearance Agreement

Count Four: Breach of Contract-Promissory Note and Deed of Trust

Count Five: Violation of the Texas Property Code

Count Six: Breach of Oral Contract-HAMP Trial Modification

Count Seven: Unreasonable Collection Efforts

Count Eight: Intentional Misrepresentation

Count Nine: Texas Debt Collection Act

Here’s how the complaint wraps up, with that wonderful Request for Relief section that always asks for the order, as they say in the sales biz.  And this one’s a good read.


A home is uniquely valuable. It is the largest investment many low income Texans will make in their lifetimes, and provides one of the few opportunities for low income Texans to build wealth. But a home is also where many of the Plaintiffs and other low income Texans raise their children and accumulate their memories. Misrepresentations that jeopardize a borrower’s home are unconscionable and the damage is irreparable. Defendant BAC’s misrepresentations to borrowers are systemic in nature and widespread in practice. Plaintiffs therefore ask that this court:

(1) Enter a temporary and permanent injunction that Defendant BAC, including its agents employees and contractors, refrain from practices, policies, and plans that result in or increase Defendants’ misrepresentations, errors, falsehoods, barriers to timely, accurate communication with Plaintiffs which are identified by the Court through the course of this litigation;

(2) Award each individual Plaintiff their actual, statutory, and exemplary damages;

(3) Award Plaintiffs their costs and attorney fees; and

(4) Grant such other relief as Court finds necessary and just.

Here’s a link to the actual complaint: 15 Texas Homeowners v. Bank of America.

Although for lawyers, I’m sure I’m stating the obvious, but for others… RESPA is a federal statute so I would think that this sort of thing could be happening all over the place… like in all 50 states.  And it’s also worth mentioning that what Bank of America is accused of here, is every bit as true for Chase, Wells, One West, US Bank, Aurora, Saxon… are you feeling me here?  Come on, multiply the number of banks and servicers times fifty states, and before you know it we could be having a national block party… I’ll bring the beer.

So, let’s all keep an eye on this, okay?  And not throw in the towel just yet.  There’s a lot going on around this country related to the foreclosure crisis.  We’re in a river, not a lake… the water we’re standing in today, won’t be the same water we’ll stand in tomorrow.

We have to win this eventually, we just have to.  We cannot just let this country deteriorate into a depressed land of inequality, lacking in opportunity, rife with corruption, besieged by poverty and dominated by a small oligarchy of immensely wealthy bankers and corporate executives who drive our elected officials like slaves.  Think that’s too dramatic?  Do you?  Which part, specifically?

We cannot lose this.  I have a daughter.

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