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Sundquist v. Bank of America: $45 Million for violations of Automatic Stay

Livinglies.wordpress.com| March 28, 2017

By Neil Garfield

In most cases, the damages awarded to homeowners are so paltry that they do little to punish unlawful conduct or to deter future behavior by servicers.  The banks continue their crime spree unabated.  Those days may be over.  A bankruptcy court in Sacramento, California recently issued a $45 million dollar punishment in a case of a wrongful home foreclosure and eviction in a deliberate violation of the automatic stay.

The court described the plaintiff-debtors’ treatment by defendant Bank of America as "Kafkaesque", and found the homeowner's deeply emotional testimony (one of them attempted suicide during the ordeal) completely credible, awarding more than $1 million in actual damages for the loss of their home and subsequent emotional distress. The court noted that Bank of America had repeatedly settled cases with federal and state regulators for hundreds of millions, and even billions, of dollars, in recognition of serious and repeated compliance failures, including some related directly to servicing home mortgages.

The homeowners didn't bring up the issue that Bank of America via Reconstruct Trust likely had no standing to have filed a Proof of Claim in the bankruptcy in the first place.  Filing a false proof of claim in bankruptcy is an additional $500k penalty.  The bank may think twice about violating state and federal law if penalties, fines, sanctions and awards are enacted for such egregious and unconscionable behavior.

The fascinating 107-page opinion discusses at length with the dilemma of awarding enough punitive damages to effectively deter the defendant while avoiding an unseemly windfall to the plaintiffs. The decision resulted in a $40 of the $45 million punitive award to consumer advocacy organizations and the five public California law schools. Citing an Ohio case, state statutes and several law review articles, the court proposes this split award technique as an appropriate step forward in the federal common law of §362(k) punitive damages. A vicious appeal is sure to follow.





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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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