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Attorney General Sues Bank Of America Subsidiary Over 'Illegal Foreclosures'

Amy Radil
08/05/2011

The Washington Attorney General's Office is suing ReconTrust, a firm it accuses of conducting illegal home foreclosures. The lawsuit claims that the Bank of America subsidiary violated state law and cost people their homes.

TRANSCRIPT

In Washington state, foreclosure trustees conduct the sale of foreclosed homes. Under state law, they must have offices in the state and must act in good faith towards borrowers and lenders both. The Attorney General's Office says the firm ReconTrust has engaged in misrepresentations and unfair practices under state law by refusing to have a Washington state office, refusing to delay home sales, and using improperly executed documents, among other issues.

At a press conference describing the lawsuit, Ruby Barrus said Bank of America told her she must become delinquent on her mortgage in order to receive a loan modification. She did so and was close to getting the modification finalized for her home in Marysville when the firm ReconTrust filed for foreclosure.

Barrus: "We'd never heard of them before. I tried to find out what was happening. And Bank of America, all they told me was it shouldn't be happening because it was in review and the loan was at the final underwriters for approval, but where was this paperwork coming from?"

Barrus learned that ReconTrust was a subsidiary of Bank of America. But the two companies just kept shuttling her back and forth. She got a lawyer and has managed to delay the sale.

Attorney General Rob McKenna says by not having a Washington office, ReconTrust denied homeowners a chance to deliver payments or documents that could have prevented the foreclosure sale.

McKenna: "Moreover the company has failed to conduct foreclosures in a public place and instead has held them in private sites like a private office building parking garage."

The lawsuit filed in King County Superior Court seeks an injunction against further foreclosures by ReconTrust. It also seeks up to $2,000 per violation. That money could go to some of the nearly 10,000 homeowners in the region whose homes were foreclosed by ReconTrust since 2008.

ReconTrust forwarded media calls to Bank of America, which didn't immediately return a call for comment.

I'm Amy Radil, KUOW News.

© Copyright 2011, KUOW

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