Business & Real Estate

Bank of America ordered to pay $46 million for foreclosure tactics used against Lincoln couple

Charlotte Observer file

Bank of America was told to pay a $46 million judgment last week after it wrongfully foreclosed on a Lincoln couple during the recession.

The order by Sacramento bankruptcy court Judge Christopher M. Klein describes in detail how the bank improperly engaged and foreclosed on Erik and Renee Sundquist’s Lincoln residence.

The judge awarded about $1 million in actual damages to the couple. Klein gave the rest of the sum to outside entities focused on consumer law and education, including the National Consumer Law Center and several University of California law schools.

The trouble began in 2009 when the Charlotte, N.C.-based bank reportedly asked the struggling couple to default on the loan in order to obtain a mortgage modification. But the bank refused to honor that promise, according to court documents.

At that point, the Sundquists filed for Chapter 13 bankruptcy, which triggered a stay on the foreclosure process. The bank disregarded the stay and started eviction proceedings. This included sending workers to the property on multiple occasions.

“Without identifying themselves, they staked out the premises, tailed the Sundquists, knocked on doors, knocked on windows, and rang doorbells, all to the terror of the Sundquist family,” Klein wrote in a 109-page opinion for the ruling.

Bank of America eventually gained possession of the property for six months, after which it then agreed that the foreclosure had been a mistake. The company returned the keys to the Sundquists. When they re-entered their home, the major appliances had been removed and the lawn was dead, according to the court.

“Throughout, the Sundquists were acting in good faith, not realizing that Bank of America had no intention of acting in good faith,” Klein wrote.

In a written statement to The Sacramento Bee on Tuesday, Bank of America expressed regret for the “challenging experience” of the customers, adding that foreclosure processes in place at the time in 2010 were later modified.

“In early review of the decision, we believe some of the court’s rulings are unprecedented and unsupported. We are determining the appropriate way to respond,” the statement said.

The ruling can still be appealed, though bank officials have not indicated whether they will pursue that route.

Richard Chang: 916-321-1018, @RichardYChang