Bank of America to pay $6 million to bankrupt couple evicted from home
Fox Business
By Katy Stech
17 August 2017
Bank of America Corp. has agreed to pay more than $6 million to a
California couple whom a federal judge said had been harassed and
illegally foreclosed upon by the bank's mortgage unit, ending an
eight-year-long dispute.
The proposed settlement between the bank and Erik and Renee Sundquist
would enable them "to end a long personal and legal nightmare that has
impacted every facet of their and their sons' lives," according to
court papers the couple filed to request that their 2014 lawsuit
against the bank be dropped.
The deal calls for Bank of America to pay a fraction of the fine of
more than $46 million ordered by Judge Christopher Klein in March.
The deal calls for Bank of America to pay a fraction of the fine of
more than $46 million ordered by Judge Christopher Klein in March. In
his ruling, the judge said the bank's mortgage modification process and
mistaken foreclosure on the Sundquists' home in Lincoln, Calif., left
them in "a state of battle-fatigued demoralization."
The exact amount that the bank will pay the Sundquists is confidential,
according to documents filed Tuesday in U.S. Bankruptcy Court in
Sacramento. The earlier order called for the bank to pay the couple
nearly $6.1 million in damages.
The couple had stopped making mortgage payments in March 2009 after
Bank of America officials said they wouldn't consider loan
modifications for customers who were current on payments. In the
following years, their roughly 20 loan-modification requests were
"routinely either lost or declared insufficient, or incomplete or stale
or in need of resubmission or denied without comprehensible
explanation," the judge's ruling said.
The couple filed for bankruptcy in June 2010. Filings halt foreclosure
sales, but the judge said the bank still improperly took over the home
and gave them a three-day eviction notice. The couple moved out, and
Ms. Sundquist was hospitalized with stress-related symptoms of a heart
attack several weeks later.
received a $20,000 fine from their homeowner association for dead landscaping
Bank of America officials eventually reversed the sale. The couple
moved back in several months later and received a $20,000 fine from
their homeowner association for dead landscaping, the ruling said.
The 107-page court opinion included excerpts from Renee Sundquist's
journal that documented harassing visits from bank-related officials
and Mr. Sundquist's suicide attempt after the couple discussed their
frustrations over the house.
The request this week to drop the lawsuit still needs approval from
Judge Klein, who agreed to discuss the settlement at a Sept. 12 hearing.
"Their physical and emotional health deteriorates each day they are
forced to endure the uncertainty of an outcome that will enable them to
repair their lives and the lives of their children," their lawyer wrote
in the request. "They do not have the ability to participate in further
litigation and appeals without grave costs to their health and quality
of life."
The settlement would enable the bank to avoid paying a court-ordered $40 million donation to five law schools
The settlement would enable the bank to avoid paying a court-ordered
$40 million donation to five law schools associated with the University
of California system and two consumer advocacy nonprofits, the National
Consumer Law Center and the National Consumer Bankruptcy Rights Center.
It's not clear whether the groups will receive any money from the
confidential settlement.
A Bank of America spokesman declined to comment Thursday. Lawyers who
represented the law schools and the nonprofits in the case did not
respond to requests for comment.
legal experts praised Judge Klein's mandatory donation, saying it could
help other judges who struggle with how to issue a damages award large
enough to make a corporate giant stop bad behavior but not to
overcompensate plaintiffs
At the time of the ruling, legal experts praised Judge Klein's
mandatory donation, saying it could help other judges who struggle with
how to issue a damages award large enough to make a corporate giant
stop bad behavior but not to overcompensate plaintiffs. Outsize legal
awards can often trigger an appeal for excessive damages.
In the ruling, Judge Klein said the fine was meant to be large enough
that it wouldn't "be laughed off in the boardroom as petty cash or
'chump change.'"
In Tuesday's request, the Sundquists said they "support the court's
message to the bank" but worried about what could happen to the damages
amount during the appeals process.
"They also recognize that the court's intentions could backfire if an
appellate court reduced the financial cost of the bank's stay
violations, " their lawyer said in court papers.
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