DEC. 17, 11:15 a.m.: David Graham just slayed Goliath in small claims court. The Big Bear City resident, with the help of Alan Sims of the Center for Litigation and Consumer Real Estate Education, took Graham's mortgage lender, Bank of America's BAC Home Loans Servicing LP, to court and won Friday, Dec. 17.
Graham sued the mega bank for fraud because he was put into a loan modification program by Bank of America when the bank knew from the start he did not qualify. Judge John Pacheco ruled that Bank of America is in violation of Californa Civil Code 1565-1590, particularly 1572, suppression of facts and 1575, undue influence.
The judge awarded Graham $7,595. This is the first known case where Bank of America has been found guilty by reason of fraud.
Sims acted as a professional witness in the case. He says Bank of America committed fraud because there is a simple calculation from the start that determines whether someone is qualified for a loan modication. The lender has 90 days to tell the client whether the loan modification is approved.
Bank of America's representative, mortgage service specialist Anthony Lopez, admitted in court that the lender continued to accept modified payments for six months after the bank determined Graham was not approved for the modification. Sims says that the representative said on record that the bank staff is not trained well enough to facilitate the loan modification rejection within six months. Audio recordings of the testimony should be available by Dec. 20, Sims says.
"They had prior knowledge," Sims told The Grizzly. "That is the key to proving fraud and getting a conviction." Bank of America is expected to appeal.
For a previous story about Dave Graham's suit against Bank of America, click here: