UNITED STATES DISTRICT COURT
DISTRICT OF COLORADO
RICHARD GEORGE; STEVEN LEAVITT
and SANDRA LEAVITT, and all others
similarly situated
Plaintiffs,
v.
URBAN SETTLEMENT SERVICES d/b/a
URBAN LENDING SOLUTIONS; BANK OF
AMERICA, N.A.
Defendants.
1. In early 2009, Bank of America (“BOA”) took more than $45 billion in
government bailout money. As a condition of receiving this bailout, BOA agreed to participate
in the Home Affordable Modification Program (“HAMP”) – a detailed program designed to stem
the foreclosure crisis by providing affordable mortgage loan modifications and other alternatives
to foreclosure to eligible borrowers. BOA signed a contract with the U.S. Treasury on April 17,
2009 agreeing to comply with the HAMP requirements and to perform loan modification and
other foreclosure prevention services described in the program guidelines.
2. Though BOA accepted billions of dollars and contractually agreed to comply with
the HAMP directives and extend loan modifications to eligible homeowners, BOA has
systematically and deliberately worked to sabotage HAMP and to modify as few mortgages as
possible according to its terms. BOA found it was more profitable if homeowners accepted inhouse
modifications rather than the loan modifications mandated by the HAMP process.
Consequently, BOA pushed homeowners who were applying for HAMP modifications toward
more expensive in-house modifications using tactics of outright fraud.
3. Rather than working diligently to reduce the number of loans in danger of default
by establishing permanent modifications, BOA serially strung out, delayed, and otherwise
hindered the modification processes that it agreed to facilitate. BOA’s delay and obstruction
tactics have taken various forms with the common result that homeowners with loans BOA
serviced, and who met the requirements for participation in HAMP, did not get a fair opportunity
to secure a permanent loan modification through the HAMP process.
4. To accomplish its objectives, BOA created a widespread RICO enterprise to
defraud homeowners who sought modifications and then acted as the kingpin of that enterprise.
BOA enlisted Defendant Urban Settlement Services (d/b/a Urban Lending Solutions, referred to
hereinafter as “Urban”) to act as a member of the RICO enterprise and assigned to Urban key
aspects of the process of administering HAMP, including interacting with homeowners seeking
HAMP modifications, collecting and processing documents from homeowners, and
corresponding with homeowners. BOA and Urban worked in concert, under BOA’s direction
and for many years, to frustrate the HAMP process and to prevent as many homeowners as
possible from obtaining permanent loan modifications that complied with HAMP while allowing
BOA to maintain the appearance to regulators and the public of trying to comply with its HAMP
obligations. Through this relationship and with this common goal, BOA and Urban formed an
association-in-fact enterprise that was effectuated through the use of thousands of false wire and
mail communications. As part of the scheme “site leaders” were told BOA would collect more
money if HAMP modifications were delayed and, as such, BOA employees were instructed to
delay HAMP modifications.
5. As part of the loan-modification scheme and enterprise, homeowners seeking
HAMP trial plans were directed by wire and mail instructions from BOA to send financial
information directly to Urban. Consumers were led to believe that they were dealing with BOA
when secretly they were communicating with Urban. As part of the loan-modification scheme
and enterprise, Urban became a “black hole” for documents sent by homeowners. As part of the
enterprise and scheme, BOA used the mail and wires to falsely deny modifications by claiming
that information required of homeowners seeking a HAMP modification had not been received,
when in fact BOA and Urban had received the documents. Oftentimes consumers were led to
believe they were speaking with BOA’s “Office of the President” when in fact they were
speaking with Urban employees. As part of the scheme Urban employees manipulated financial
records to justify ending the HAMP modifications process for homeowners.
6. Numerous former employees of both BOA and Urban report that BOA directed its
employees and contractors to use the wires and mails to deliberately lie to homeowners who
were in the process of trying to obtain loan modifications under HAMP. They further report a
widespread and deliberate practice of knowingly issuing false notices claiming that homeowners
had failed to submit required documentation and of denying HAMP applications en masse for
reasons they knew to be false. These actions were taken with the full knowledge, and at the
direction, of the individuals tasked with running Defendants’ HAMP modification program.
7. This scheme was conducted via interstate mail and phone lines, in thousands of
documents sent via mail and overnight courier, including documents and phone calls intended to
deceive borrowers into believing they would receive HAMP modifications, and letters and phone
calls which were knowingly false about why borrowers were not receiving HAMP modifications.
8. Because of the BOA-Urban loan-modification scheme, hundreds of thousands of
homeowners were wrongfully being deprived of an opportunity to cure their delinquencies, pay
their mortgage loans and save their homes. By failing to live up to its obligations under the
terms of the agreement it entered into with the Department of the Treasury, and the terms of the
contracts it formed with individual homeowners, BOA has left thousands of borrowers in a state
of limbo – often worse off than they were before they sought a modification from BOA.
9. On behalf of nationwide classes of borrowers, Plaintiffs state a cause of action
under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c), alleging
that Defendants created an association-in-fact enterprise designed to mislead and deceive
borrowers through use of the United States mail and wires. On behalf of the members of those
classes, Plaintiffs seek declaratory relief and/or a judgment of liability.
10. In addition, on behalf themselves and statewide classes of similarly situated
borrowers, Plaintiffs state claims of promissory estoppel for representations made to them by
Defendants.
[…]
