(CN) — Homeowners can sue Bank of America for claims it feigned compliance with a mortgage assistance plan that was a condition of the bank’s $45 billion bailout in 2008, the 10th Circuit ruled Monday.
Bank of America hired Urban Settlement Services dba Urban Lending Solutions to administer its Home Affordable Modification Program, or HAMP.
The bank was required to participate in HAMP as a condition of receiving a $45 billion bailout from the federal government to shore up the bank’s bad loans during the 2008 financial crisis. The government also guaranteed $118 billion in potential losses at the bank.
HAMP required Bank of America to collect financial information from at-risk borrowers, and evaluate their eligibility for a loan modification that would allow them to pay a lower interest on their mortgage.
The program allowed eligible borrowers to enter a trial period plan to demonstrate their ability to make lower…