Sat Dec 18, 2010


Bank of America's headquarters in Charlotte, North Carolina

Authorities in the US states of Arizona and Nevada are pressing charges against Bank of America Corp., accusing it of defrauding homeowners with financial problems.

State attorney generals in the two US states filed lawsuits against America's largest bank on Friday.

According to the Arizona lawsuit, Bank of America violated a 2009 consent judgment by which it committed to loan modifications, valued at roughly $8.4 billion nationally, Reuters reported on Friday.

The lawsuit further claims that the company has also violated the Arizona's consumer fraud act, by telling customers that their modifications were declined because investors in mortgage-backed securities had not approved them, while such permissions were not necessary in some cases.

The Arizona lawsuit demands $25,000 per violation of the consent decree, and up to $10,000 for consumer fraud breaches.

"This was an opportunity for the two states which have felt the biggest impact of the foreclosure crisis to stand up and say, 'This has got to stop,'" Arizona Attorney General Terry Goddard said.

Bank of America is already being probed for its mortgage foreclosures practices in a 50-state investigation that is also looking at other major mortgage servicers in the United States.

While some say that the two state lawsuits may complicate the ongoing probe into Bank of America, Iowa Attorney General Tom Miller -- who heads the multi-state probe -- says the recent legal action "neither changes, nor dilutes, the strong and resolute multi-state effort to address serious problems that have been identified with a number of mortgage servicers."

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