“The mirage of promised mortgage modification lured the plaintiff debtors into a kafkaesque nightmare of stay-violating foreclosure and unlawful detainer, tardy foreclosure rescission kept secret for months, home looted while the debtors were dispossessed, emotional distress, lost income, apparent heart attack, suicide attempt, and post-traumatic stress disorder, for all of which Bank of America disclaims responsibility.” All too familiar.
How much in punitive damages is enough to punish unlawful conduct and deter its repetition? $45 million was one bankruptcy court’s opinion, in the case of a wrongful home foreclosure and eviction in knowing violation of the automatic stay.
The court described the plaintiff-debtors’ treatment by defendant Bank of America as Kafkaesque, and found their deeply emotional testimony (one of them attempted suicide during the ordeal) completely credible, awarding more than $1 million in actual damages for the loss of housing and emotional distress. The court also noted that Bank of America had repeatedly settled cases with federal and state regulators for hundreds of millions, and even billions, of dollars, in recognition of serious and repeated compliance failures, including some related directly Continue reading →
Big banks hold great sway in Washington these days, far more than troubled homeowners do. But outside the Beltway, many people remain caught in the maw of the financial giants, which is why it is heartening when some judges step into the fray.
Consider two opinions involving Wells Fargo, a bank that enjoys a somewhat better reputation than many of its peers. On Monday, a judge in a state court in Missouri ordered Wells to pay over $3 million in punitive damages and other costs for abusing a borrower. Then, on Thursday, a judge in Federal Bankruptcy Court in suburban New York ruled on behalf of another borrower, concluding that there was substantial evidence Wells Fargo forged documents when it foreclosed on a property. Continue reading →
Fannie Mae is staying on the offensive against Wall Street.
Fannie Mae is reportedly suing nine banks for a total of about $800 million over alleged manipulation of the benchmark London interbank offered rate (Libor), the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks. Continue reading →