bank of americaA judge recently hit Bank of America (BAC) with $126,000 in damages, $63,000 of them punitive, for contempt of court. How did BofA express its contempt for the legal system this time (as opposed to robo-signing)? By "flagrantly ignoring the terms of a [court] order".

Michael and Dolores Kirkbride filed for bankruptcy, and as part of the process, signed a consent order with Countrywide Home Loans to let it foreclose on two properties in exchange for releasing the Kirkbrides from the mortgage debt. That order was made effective October 27, 2008 -- and Countrywide started violating it three days later. U.S. Bankruptcy Judge J. Rich Leonard found it
particularly frustrating [that Countrywide] actively negotiated the terms of the consent order with the debtors, signed the order, and later, through the its agents, repeatedly acted as if the order did not exist and made it nearly impossible for the debtors to bring the order to [its] attention.
As of the time of publishing, BofA had not responded to a call for comment.

What did Countrywide -- and later, BofA -- do that so frustrated the judge? From October 30, 2008 through May, 2010, the bank called the Kirkbrides over 400 times demanding payment of the settled debt, of which they answered at least 100. Each of those calls took 30 to 40 minutes and involved the typical customer service pleasure of "being put on hold and repeating the same information to more senior personnel."

In addition, Countrywide and BofA sent the Kirkbrides over 20 letters demanding payment, and -- because the bank didn't foreclose on one of the properties until February, 2010 and still hasn't foreclosed on the other -- caused the Kirkbrides to run up tax bills and homeowner association dues. Since the local government and homeowners association went after the Kirkbrides to collect, the bank's failure to foreclose "embarrassed and humiliated" the Kirkbrides. Finally, unlike all the other creditors that the Kirkbrides dealt with in their bankruptcy, BofA refused to report their debt as settled to the credit bureaus. As a result, the Kirkbrides' credit reports have had a large and misleading black mark for two years.

On January 5, 2010, the Kirkbrides got BofA to acknowledge that it had received a letter from them containing the consent order, and the bank promised it would respond within 20 business days. But the harassment continued, and no response was forthcoming. Only when the Kirkbride's attorney asked the judge to sanction BofA in May did the harassment stop.

To compensate the Kirkbrides, the judge ordered BofA to pay them $200 for each call the Kirkbrides answered and spoke with BofA; $50 for each call they skipped; $2000 for the wrongful written demands; and $10,000 for causing the tax and homeowner association bills and related problems -- $63,000 in all. Turning to punitive damages, the judge noted that the standard for "punitive damages for violation of an order ... requires a demonstration of 'egregious conduct,' 'malevolent intent,' or 'clear disregard of the bankruptcy laws.'" He then explained it was:
appallingly clear to the court that Countrywide and Bank of America, as successor-in-interest, flagrantly disregarded the court's order and discharge injunction. The creditor harassed the debtors with phone calls and repeatedly dismissed the debtors' attempts to resolve the situation in the face of a clearly worded order barring further collection on these debts. It is beyond egregious that after almost two years of facing such harassment on their own, the debtors finally caught the attention of Bank of America only when they retained counsel and filed this motion.
With this new court order in hand, the Kirkbrides seem assured of a happy Thanksgiving. I can't imagine BofA "flagrantly" disregarding this one.

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Here is one for the books. My freind has a home loan with BofA and is definately current and has never ever been behind. Yesterday he got a notice of Foreclosure. He is definately Pissed to say the least. Casa Grande AZ. Tell me BofA knows what they are doing ... Makes me laugh.

November 27 2010 at 11:45 PM Report abuse rate up rate down Reply

BofA has granted me a modification over a year ago but yet to send docs. I hope it's worth waiting for. I found I was granted this when my R.E. agent called to find out a payoff. Put me in an ugly situation as this realtor was not to be compensated for his work. lucky I went on line and printed out the approval because it somehow dissapeared later. Like so many documents at BofA. They must have some heavy duty shredders! Hungry ones.

November 24 2010 at 5:51 AM Report abuse rate up rate down Reply

If there is one thing I do know dealing with the Banksters of America is that they will screw this up also. Those of you who have had dealing with the Banksters know what I am talking about. THEY WILL SCREW THIS UP.

November 24 2010 at 1:34 AM Report abuse +1 rate up rate down Reply

The banks have been ignoring even the mortgage contracts they have with home owners and just make up their own rules, (witch only play out against them in the end!). No one has made them follow any laws what so ever, holding regulators, who's job it is to make sure the banks aren't ripping off our money and are doing business lawfully, accountable for letting this go for so long and costing home owners everything as well! It's a huge mess they have gotten themselves into, and it did not have to be like this if they did their jobs they are paid to do. Homeowners just want to work out a more payable loan month to month and get going again, but until this circus is delt with (if we should even trust any of them any more with our homes or money), homeowners can only stand by and hope there is someone out there who knows at least half of their profession and what they are doing.

November 23 2010 at 5:51 PM Report abuse +2 rate up rate down Reply

The banks need to be dismantled now, the corruption, fraud, predatory lending, harrassment, libel, it's beyond what civilized normal people would ever consider best business practices. And where is BARNEY and Where is Geithner? I have alot of quesitons, cause I too am in this situation. And the more I learn as I go on, the more disgusted I get.

November 23 2010 at 1:34 PM Report abuse +3 rate up rate down Reply

What is stopping the bank from ignoring the new court order? Do you really believe the bank will pay the fines? They'll spend twice as much to appeal, fight and enrich their in house lawyers, probably related to the bank's top brass.

November 23 2010 at 1:28 PM Report abuse +5 rate up rate down Reply