Bank of America Corp. asked a bankruptcy judge to reconsider his $45 million fine over its treatment of a California couple who requested lower mortgage payments, calling the amount “unprecedented in its magnitude.”
In court papers, bank officials asked Judge Christopher Klein to amend his 107-page ruling against the bank, arguing that his “excessive” fine amount violates guidance from Supreme Court justices in 2008 meant to prevent outsized awards. The fine, the bank said, stands as the largest punitive damages award for violations of bankruptcy law’s automatic stay rules, which ban lenders from advancing foreclosures and taking other actions.
The ruling, issued March 23, said that bank officials mistreated California couple Renee and Erik Sundquist as they fought to save their home outside Sacramento from foreclosure. The decision, which renewed attention to the mortgage industry’s loan-servicing business, called for the Sundquists to donate most of the $45 million award to five law schools and two legal-aid nonprofits.
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