Calif. Homeowner Claims He was Misled About Bank of America Mortgage Deferral, Forbearance

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A California resident alleges Bank of America has deceived consumers by failing to divulge that their mortgage loan amounts would increase as a result of opting into deferral/forbearance. 

The 12-page case looks to represent all persons who, within the applicable statute of limitations period, requested forbearance and/or deferred payments on a mortgage loan serviced by Bank of America and had the balance of their mortgage increase as a result of doing so. 

Per the complaint, the plaintiff, a California resident, called Bank of America in early May 2020 to inquire about deferred payments and/or mortgage forbearance. The consumer specifically wished to find out whether a deferred payment program or forbearance would increase the overall amount of his loan or his monthly mortgage payment, the suit says. The Bank of America representative informed the plaintiff that the program “simply moved the deferred months to the end of the loan” and would not impact its total amount, including interest and principal, the lawsuit relays. 

“Defendant’s representative further stated that the forbearance was just a change in the time period for the payments, or in other words, it would pause the mortgage payments for three months and then return to the normal payment schedule, with only the maturity date changing,” the case expands, noting the plaintiff, after speaking with the defendant, requested forbearance on his mortgage. 

After two months, the plaintiff canceled the forbearance, the suit says, and in November 2020 paid off his loan, remitting to Bank of America more than $710,000, per the complaint. 

Upon paying off his loan, however, the plaintiff discovered that the payoff amount did not accurately reflect the amount he actually owed on the obligation, and that Bank of America charged him an additional amount during the deferral period, the lawsuit alleges. According to the complaint, the plaintiff should have had to pay $701,429.34, meaning he was overcharged by more than $9,000 on his mortgage.

When the plaintiff contacted Bank of America with regard to the discrepancy, the defendant’s representative contradicted what the man had been told earlier with regard to deferred payments, the suit claims. In truth, the plaintiff learned the deferral period did not pause his loan, “but rather added an additional two months of mortgage payments” to the total amount, the case says. 

“Had Plaintiff known that Defendant would increase the amount due on his loan, plaintiff would not have pursued forbearance or opted to defer monthly payments,” the case asserts, claiming the man was never notified prior to requesting forbearance that his mortgage loan amount would increase as a result. 

Initially filed in Santa Cruz County Superior Court on May 18, the case was removed to California’s Northern District on June 24. 

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