Mortgage Loan Compliance | Arizona vs. Bank of America

State Attorney General Terry Goddard said Friday as he filed a civil lawsuit against Bank of America Corp. for violating Arizona's consumer fraud law by misleading consumers who tried to reduce their mortgage payments so they could keep their homes.

Hundreds of homeowners kept making their mortgage payments because Bank of America repeatedly assured them their loan was being modified, he said. Instead, many lost their homes anyway.

"Those people could have used that money for something else," Goddard said. "They were deceived into continuing to make mortgage payments when they had no hope of saving their homes."

The attorney general's office was deluged with consumer complaints and launched an investigation more than a year ago, Goddard said. Settlement talks with Bank of America began in April but ultimately collapsed Thursday.

The bank also violated the terms of a 2009 consent agreement requiring the bank's Countrywide mortgage subsidiary to implement a loan modification program, the lawsuit alleges.
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