Unauthorized Escrow Accounts

Class Action Attorneys investigating unauthorized escrow accounts allegedly opened by Bank of America on behalf of clients with mortgages. The Lyon Firm represents clients nationwide in deceptive banking and mortgage lawsuits.

Bank of America, with a portfolio of outstanding consumer loans worth hundreds of billions, has been hit with a proposed class action lawsuit over a host of alleged policies and actions that claim consumers and mortgage loan borrowers have been taken advantage of.

The Bank of America class action lawsuit alleges that the bank has a practice of selling consumers “add-on products” with their mortgages that they may not want, may not need, or may not even be aware of. Lawyers say it may be difficult for consumers to cancel these products once they have been attached to their mortgages.

One recent plaintiff alleges Bank of America created an escrow account for her mortgage without her consent or authorization. According to the unauthorized escrow lawsuit, Bank of America opens escrow accounts and other add-ons because the instruments are profitable to the bank, whether or not they are useful for the client.

If you have been a victim of unauthorized escrow accounts, or another hidden add-on to a mortgage loan, you may have a case against a financial institution. Banks often engage in unscrupulous activity that has no benefit to customers, though may bolster their bottom line.

Joe Lyon is a class action consumer protection attorney representing plaintiffs nationwide in unauthorized escrow lawsuits and other mortgage fraud litigation. Contact The Lyon Firm for a free consultation.

Unauthorized Escrow Account Lawsuits

At least one class action lawsuit filed against Bank of America claims the bank automatically enrolled customers in profitable add-on financial products without consent, including escrow or impound accounts for mortgage services. Customers were provided no opportunity to agree to the purchase in written form.

According to the lawsuit, Bank of America improperly added an escrow account to the plaintiff’s mortgage, with BofA keeping the interest on the account. In the plaintiff’s case, the escrow account nearly doubled the woman’s mortgage payment.

The complaint says the plaintiff consented to waive escrow when she closed on her property in March 2013. When she called Bank of America in 2019 to inquire about what an escrow account would cost, she informed the defendant that she’d already paid all of her property insurance premiums for the year. The bank went on to open an unauthorized escrow account and paid more than $1,400 to her property insurer.

Bank of America also allegedly has a policy of paying property insurance premiums to third-party insurers from the aforementioned mortgage escrow accounts without properly learning whether money should be paid in the first place.

Deceptive Banking Practices

The lawsuit also alleges Bank of America utilizes a customer service call system that discourages customers looking to make changes or take actions that may benefit them yet be detrimental to the bank. Plaintiffs claim the call center system limits information access to front-line customer service reps, leading to “long hold times,” and is meant to end calls without deserved problem solving.

Plaintiffs say their experience with Bank of America’s customer service and call center systems are proof of bank policies that incentivize the creation of escrow accounts without consent. The defendant claims the plaintiff agreed to the account verbally, however they have not let her listen to a playback of that phone call, which it admitted it had recorded, and refused to provide her with a copy of that recording.

Bank of America Unauthorized Escrow

Noted in the plaintiff’s complaint is Bank of America’s alleged history of significant problems and customer abuse across its consumer lending and mortgage servicing sectors. In March 2019, the Consumer Financial Protection Bureau (CFPB) issued a civil investigative demand to Bank of America as part of an inquiry into unauthorized accounts. Bank of America turned over emails and other records, and the CFPB’s investigation is ongoing.

BofA has had legal issues in the past, stemming from similar circumstances, and customer claims that the bank engages in unfair, deceptive banking and mortgage practices. In 2012 the bank consented to a $25 billion settlement with the federal government to resolve allegations of loan servicing and foreclosure abuses.

In 2013 BofA was one major lender that agreed to pay a total of $8.5 billion to resolve claims of foreclosure abuses. In December of the same year BofA agreed to pay $404 million to settle claims that the bank had sold hundreds of thousands of defective home loans to Freddie Mac. That same month, the SEC announced that the bank would pay $131.8 million to settle allegations that Merrill Lynch had misled investors about collateralized debt obligations.

In April 2014 the Consumer Financial Protection Bureau ordered BofA to pay $727 million to compensate consumers harmed by deceptive marketing of credit card add-on products.

Wells Fargo Mortgage Litigation

According to plaintiffs, Wells Fargo made a significant error in failing to set customers’ second mortgages to end after the final payment date. Wells Fargo allegedly changed the maturity dates on mortgages that secured home equity loans without informing its customers.

The bank allegedly filed documents without their customers’ consent, and at the same time the bank could also act to invalidate the property titles and damage the value of customers’ homes. Wells Fargo clients with home equity loans can contact The Lyon Firm if they suspect unlawful or ethical corporate behavior.

Consumer protection attorneys have filed class action lawsuits against Wells Fargo for allegedly opening unauthorized deposit and credit accounts. The bank has also come under legal pressure in recent years for selling customers auto insurance they didn’t want or need.

Plaintiffs have the opportunity to recover rightful compensation and hold their financial institution accountable for deceptive mortgage and banking practices.