Bank of America (NYSE: BAC) has been sued by a group of California homeowners on Tuesday claiming that the Charlotte, N.C.-based lending giant is purposefully withholding government money intended to prevent homeowners from entering foreclosure.
The case, which was filed in U.S. District Court in Northern California, alleges that Bank of America has intentionally prevented or slowed access for homeowners to funds under the Troubled Asset Relief Program (TARP) by ignoring requests for homeowners to make mortgage adjustments or come up with other solutions that would prevent their homes from being foreclosed on.
“We intend to show that Bank of America is acting contrary to the intent and spirit of the TARP program, and is doing so out of financial self interest,” said Steve Berman, managing partner of Hagens Berman Sobol Shapiro, the law firm filing suit against Bank of America.
Data from the Treasury Department indicates that Bank of America has only provided 12,761 permanent mortgage modifications despite servicing more than 1 million mortgages that qualify for some form of financial relief.
“We contend that Bank of America has made an affirmative decision to slow the loan modification process for reasons that are solely in the bank’s financial interests,” Berman said.