BofA in foreclosure probe

27 May 2011

Increased pressure is being placed on Bank of America (BofA) from two attorney generals who want the institution to alter its mortgage servicing and foreclosure practices.

Connecticut attorney general George Jepsen stated the bank had failed to put right its mortgage servicing problems, while Utah's Mark Shurtleff claimed the lender had broken state law, Bloomberg reports.

It was suggested that BofA and four other servicers could face up to $17 billion in claims - and the news agency noted such moves by states highlights the targeting of the mortgage servicing sector by attorney generals.

Kurt Eggert, a professor at Chapman University School of Law in Orange, California, said: "It's realistic that if the banks don't craft some kind of settlement that they will face significant lawsuits in some states."

It recently emerged that BofA is to pay $410 million in an effort to settle its share of a lawsuit that centres on excessive overdraft fees on debit cards.

By Claire Archer

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