Bank of America and 11 savings and loan associations are accused in a lawsuit filed on behalf of 100,000 California homeowners of collecting excessive fees from California homeowners who settled foreclosure actions.
The lawsuit, filed Tuesday in San Francisco Superior Court, is an outgrowth of an earlier action against T. D. Service Co., the state's largest agency handling foreclosures for lenders, which resulted in a $4.5-million settlement last September.
Attorney Thomas A. Jenkins, who handled both cases, alleges in the new class-action lawsuit that lenders whose subsidiaries handle foreclosures routinely charge the maximum fees allowed by state law regardless of their actual processing costs. This, he maintains, places an unfair financial burden on homeowners attempting to "cure" foreclosure proceedings against their property.
'Major Profit Centers
Borrowers at these institutions, Jenkins said, "have no idea that the trustee under the deed of trust is a wholly owned and controlled subsidiary of the bank or savings and loan, since the name of the trustee usually bears no resemblance to the lending institution." Bank of America's "in-house" trustee, for example, is Continental Auxiliary, he said.