Class Action: Bank of America Inspection Fees Racketeering

Class Action: Bank of America Inspection Fees Racketeering

LOS ANGELES (CN) – Bank of America charged hundreds of thousands of distressed homeowners millions of dollars for unnecessary house inspections that forced them to default on mortgages, according to a RICO class action.
     John Cirino sued Bank of America, BAC Home Loans Servicing fka Countrywide Home Loans Servicing and Bank Home Loans Servicing in a federal RICO complaint.
     Cirino, of Mississippi, claims Bank of America charged millions of dollars to borrowers who “can least afford” it.
     Mortgage servicing companies, unlike lenders who have an interest in home loans, make their money from managing loan accounts, Cirino says, and earn fees when borrowers go into foreclosure.
     For that reason, he says, servicing companies are less concerned about whether borrowers are keeping up with payments on their loans.
     “Financial institutions like defendants see opportunity where investors see failure, because borrowers are captives to companies who service their loans,” the lawsuit states. “Accordingly, when borrowers go into default and defendants unilaterally decide to instruct third parties to perform default-related services, borrowers have no option but to accept defendants’ choice of providers.”
     That’s where loan inspections come in, Cirino claims, and it exemplifies “how America’s lending industry has run off the rails.”

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