Foreclosures Suit Names B of A, 11 S
Bank of America and 11 savings and loan associations are accused in a lawsuit filed on behalf of 100,000 California homeowners of collecting excessive fees from California homeowners who settled foreclosure actions.
The lawsuit, filed Tuesday in San Francisco Superior Court, is an outgrowth of an earlier action against T. D. Service Co., the state’s largest agency handling foreclosures for lenders, which resulted in a $4.5-million settlement last September.
Attorney Thomas A. Jenkins, who handled both cases, alleges in the new class-action lawsuit that lenders whose subsidiaries handle foreclosures routinely charge the maximum fees allowed by state law regardless of their actual processing costs. This, he maintains, places an unfair financial burden on homeowners attempting to “cure” foreclosure proceedings against their property.
‘Major Profit Centers
Borrowers at these institutions, Jenkins said, “have no idea that the trustee under the deed of trust is a wholly owned and controlled subsidiary of the bank or savings and loan, since the name of the trustee usually bears no resemblance to the lending institution.” Bank of America’s “in-house” trustee, for example, is Continental Auxiliary, he said.
“The Legislature never envisioned these subsidiary companies always charging the maximum trustee fee allowed by law and becoming major profit centers,” he added.
Legislation introduced Feb. 21 by Sen. Art Torres (D-Los Angeles) would prevent lending institutions or their subsidiaries from charging trustee fees during foreclosure proceedings. (The measure, SB 2519, has yet to be scheduled for hearing in the Senate Judiciary Committee.)
Besides Bank of America, the lawsuit names American Savings, California Federal, California Savings, Coast Savings, First Nationwide Savings, Gibraltar Savings, Glendale Savings, Great Western Savings, Home Savings of America, Imperial Savings and World Savings.
Spokesmen for several of the defendants said they have heard of the lawsuit but have not yet received copies.