SEATTLE - As many Americans struggle to avoid foreclosure, a Seattle attorney claims the big banks who took big bailouts are refusing to help bail out their customers.
Steve Berman of the firm Hagens has filed a lawsuit in federal court against Bank of America.
"I wouldn't have filed this suit if this is the first time I heard this story. But we have been hearing about this for a year," Berman said.
The issue is the program aimed at helping struggling homeowners to avoid foreclosure, but allowing banks to modify loans and reduce monthly payments.
But Berman says while the banks were quick to take taxpayer money, they are slow to return the favor, leaving homeowners who are following the rules of the program hanging in limbo.
Bank of America says it has not seen the lawsuit yet, but stresses it is helping its customers.
Spokeswoman Jumana Bauwens says "since January 2008, Bank of America has helped more than 760,000 customers with a loan modification."
"That includes more than 500,000 modifications through our own programs, in addition to nearly 21,000 completed mortgage modifications and nearly 240,000 active trial modifications through the federal government’s Home Affordable Modification Program (HAMP)," she added.
But Berman says the problem goes beyond B of A and is "systemic" across the industry.
Part of the suit asks a judge to assign an independent overseer of the program.
"You don't need a bureaucracy," he said. "You just need someone to go in, figure out the problem, and order the banks to do it the right way."
Berman says there is no one in the government that is doing that.
"So this is where our clients have to go - the courts," he said.
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