Bank of America, which purchased Countrywide Financial Corp., will pay $250 million to settle a class action lawsuit alleging that Countrywide participated in a fraudulent real estate appraisal scheme. If approved, the settlement will end a nearly seven-year-old case that revolves around allegations that Countrywide, which Bank of America bought in 2008, and an affiliated appraisal vendor, schemed in the years leading up to the financial crisis to generate bogus, inflated appraisals in order to close as many home loans as possible.

The settlement provides that the estimated 2.4 million class members will not have to file claims forms to receive a cut of the $250 million common fund. The proposed settlement class is defined as U.S. residents who applied for a mortgage loan at the now-defunct Countrywide and whose properties were appraised by affiliated vendor LandSafe Inc. from 2003 through 2008.

The amount paid to each borrower will represent at least 22% of the appraisal fee taken by the defendants when assessing the mortgage applications, according to the filing.

The cases are Waldrup v. Countrywide Financial Corp. et al., case number 2:13-cv-08833, and Williams et al. v. Countrywide Financial Corp. et al., case number 2:16-cv-04166, both in the U.S. District Court for the Central District of California.

This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.

Sign up to receive Class Actions Blog posts in your inbox!


On July 29, 2013, Judge King, from the Southern District of Florida, approved a $55 million settlement between US Bank and a proposed class of over one million customers of US Bank, putting to rest a class action accusing the bank of manipulating debit card transactions to collect higher overdraft fees.

Continue reading “Court approves $55 million settlement in US Bank overdraft class action”

House key ring vectorSix former Bank of America employees have filed a class action lawsuit alleging the bank instructed them to mislead home loan customers and gave workers Target and Bed Bath & Beyond gift cards, and $500 monthly bonus checks for placing ten or more accounts in foreclosure.

Continue reading “Lawsuit: Bank of America gave employees gift cards for hitting foreclosure quotas”

FeeU.S. District Judge William Alsup reinstated on Tuesday a penalty he first imposed in August 2010, saying the fourth-largest U.S. bank violated a California law that protects consumers against fraudulent misrepresentations.

Continue reading “$203 million verdict against Wells Fargo in excessive overdraft case reinstated”

Stocks and sharesFederal Judge Kevin Castel approved a $2.4 billion settlement between Bank of America and investors who suffered losses in connection with the company’s $18.5 billion Merrill Lynch acquisition in January 2009.  “This was the antithesis of a collusive settlement,” Judge Castel said, characterizing the settlement as “fair, reasonable and adequate.”

Continue reading “Judge approves $2.4 billion Bank of America settlement”

Stocks and sharesThis class action arose out of mortgage backed securities that were downgraded to junk.  The accord will end a class action, or group lawsuit, led by the Iowa Public Retirement System.  The settlement, which couldn’t immediately be verified in court records, requires a judge’s approval, North Carolina-based Bank of America said in a filing with the U.S. Securities and Exchange Commission.

Continue reading “Bank of America agrees to pay $500 million to settle mortgage backed securities class action”

Blog Wage and HourMerrill Lynch has agreed to create a $12 million fund to settle a class action lawsuit alleging it didn’t properly pay overtime to employees who provide support services for brokers.  The court for the Southern District of New York must still approve the settlement, which was announced in a filing Friday. Merrill Lynch is the retail brokerage unit of Bank of America Corp.

The lawsuit, which was filed in June 2011, alleged that Merrill Lynch client associates were paid overtime based on an incorrect and low regular rate of pay and that Merrill failed to properly record and account for all overtime hours they worked. Continue reading “Merrill Lynch settles overtime class action”

According to The New York Times, the price being paid by Bank of America for its missteps during the financial crisis rose sharply on Friday as the bank announced a $2.43 billion deal to settle accusations that it misled investors about the acquisition of Merrill Lynch.  It is the largest securities class-action lawsuit settlement yet to arise from the financial crisis.

Shareholders, led by pension funds, including those in Ohio and the Netherlands, had accused the bank of providing false and misleading statements about the health of the Wall Street firm, which, unknown to the public, was racking up huge losses in late 2008 amid turmoil in the markets. Continue reading “Bank of America settles securities class action regarding acquisition of Merrill Lynch”

Bank of America customers won preliminary court approval of a $20 million settlement over claims the bank signed up and charged credit card customers for a useless credit protection service.

Credit card customers had filed a class action accusing the bank of signing them for its Credit Protection Plus service without their permission or through deceptive marketing and giving them nothing meaningful in return for the monthly fees they were charged. Continue reading “Bank of America settles class action alleging useless credit protection service”

On July 11, 2012, Judge Michael Simon of the United States District Court for the District of Oregon issued a ruling that permitted the plaintiffs’ breach of contract claims to proceed in a nationwide class action alleging that Bank of America improperly force-placed high-premium flood insurance policies on homeowners across the United States.

In their complaint, plaintiffs Ronda and Larry Arnett allege that Bank of America has a practice of force-placing flood insurance coverage above the amounts required by borrowers’ mortgage contracts and by federal law. Continue reading “Forced place flood insurance class action against Bank of America can proceed”

The New York Times reported on July 11, 2012, that Baltimore has been leading a battle in Manhattan federal court against the banks that determine the interest rate, the London interbank offered rate, or LIBOR, which serves as a benchmark for global borrowing and stands at the center of the latest banking scandal. According to the article, cities, states and municipal agencies nationwide, including Massachusetts, Nassau County on Long Island, and California’s public pension system, are looking at whether they suffered similar losses and are weighing legal action. Continue reading “NY Times reports that municipalities are filing suits against LIBOR banks”

Citizens Bank is the latest institution to settle a class-action lawsuit alleging that banks changed the order of customer payments to increase the amount they could collect in overdraft fees. The fees are charged when customers, by writing checks or using debit cards, spend more than is available in their checking accounts.  Citizens Bank, part of Citizens Financial Group and a unit of the Royal Bank of Scotland, agreed to pay $137.5 million to settle the lawsuit, which was transferred by the MDL panel to the Southern District federal court in Miami.  Citizens Bank admitted no wrongdoing in the settlement, which must be approved by the court.  Based in Providence, R.I., Citizens has 1,500 branches in states stretching from New England to the Midwest. Continue reading “Citizens Bank settles excessive overdraft class action”

Investors suing Bank of America Corp. won class action status for their lawsuit accusing the bank of fraudulently misleading them about the 2008 takeover of Merrill Lynch & Co. and the size of Merrill’s losses and bonus payouts.

U.S. District Judge P. Kevin Castel in Manhattan on February 6th rejected the second largest U.S. bank’s argument that the investors could not prove they suffered losses by relying on materially misleading statements or omissions. Continue reading “Securities class action against Bank of America certified”

Bank of America Corp. (BAC) will pay a record $335 million to compensate Countrywide Financial Corp. borrowers who were charged more for home loans based on race and national origin.

Countrywide, acquired by Bank of America in 2008, assessed higher fees and interest rates to more than 200,000 black and Hispanic borrowers, the U.S. Department of Justice said yesterday in a statement. The lender also steered minorities into higher-cost subprime mortgages from 2004 to 2007, even when they qualified for prime loans, the agency said. Continue reading “Bank of America settles discrimination suit brought by US Dept of Justice”

In early December, 2011, Bank of America Corp. (BAC) reached a $315 million settlement with a group of investors who sued its Merrill Lynch unit claiming they were misled about mortgage-backed securities, according to a court filing.

Holders of the asset-backed certificates sued Merrill Lynch starting in December 2008 for alleged “false and misleading” prospectus statements related to the securities, according to the complaint and a brief filed on December 5 in Manhattan federal court. Continue reading “Bank of America settles mortgage securities class action”

Plaintiffs in a class action lawsuit against Bank of America will soon receive their piece of a $9.95 million settlement.  The suit alleged the bank did not properly notify customers that it used credit scores to process mortgages and home equity loans, which is required under the federal Fair Credit Reporting Act.

A federal class action filed in Oregon claims Bank of America forces home-buyers to buy more flood insurance than required by law, in violation of loan documents, through a former subsidiary that pays B of A kickbacks.  A copy of the Complaint in Arnett, et ux. v. Bank of America, N.A., et al., Case No. 11-cv-01372 (D. Ore.), is available here.

Federal District Court Judge King gave final approval Monday to a $410 million Bank of America settlement related to a class-action lawsuit that accused it of charging excessive overdraft fees to millions of debit-card customers.  The settlement will give account holders as much as 45 cents on the dollar on their claims, according to co-lead counsel for the plaintiffs. Continue reading “Federal judge OKs Bank of America’s $410 million settlement”

On September 26, 2011, the Second Circuit Court of Appeals joined the Seventh, Ninth, and District of Columbia Circuits in holding that wage and hour plaintiffs can pursue state law class actions under Rule 23 along with their collective actions under the Fair Labor Standards Act (FLSA). See Shahriar, et al., v. Smith & Wollensky, et al., Case No. 10-1884 (2nd Cir. Sept. 26, 2011). In Shahriar, the plaintiffs claim that famed steakhouse Smith & Wollensky violated the FLSA and the New York Labor Law (NYLL) by requiring waiters to share tips with “tip-ineligible employees,” and failed to “pay waiters for an extra hour’s work when their workdays lasted more than ten hours.” Continue reading “Second Circuit upholds hybrid class and collective actions”

Bank of America Corp., JPMorgan Chase & Co. and other banks may pay more to resolve claims over their alleged roles in the collapse of a $2.3 trillion mortgage-backed securities market if sophisticated investors are allowed to sue as a group with less savvy ones.

Class action status allows investors to pool financial and legal resources, giving them greater leverage to win larger settlements or verdicts.  The banks, however, have a court ruling on their side that may help fend off such blockbuster cases.  It says class status is barred because some investors are too sophisticated — in fact, because some of them are other banks, including JPMorgan. Continue reading “If class actions are certified, banks may pay more to resolve mortgage backed securities class actions”