Bank of America Unauthorized Escrow Account Class Action

Bank of America is a large entity, with a portfolio of outstanding consumer loans worth $236 billion. But the complaint for this class action alleges that the bank sells consumers add-on products with their mortgages that they do not want. In addition, the complaint says, it may be difficult for consumers to get rid of these products once they have been attached to their mortgages.

Plaintiff Gina Zahran owned a condominium in Tampa, Florida. In 2013, she took out a refinancing mortgage loan with Bank of America.

Because she had been paying her property taxes and insurance herself all along, she did not want a mortgage escrow account. She and Bank of America agreed to an Escrow Waiver.

In November 2019, Zahran called Bank of America to ask what the cost of an escrow account would be. She made clear that she was not asking for the account at the time, merely for a quote. The representative said nothing would change unless she signed the paperwork for the account. However, the bank did set up an escrow account for her.

The complaint alleges, “BofA’s hair trigger approach to opening escrow accounts is intentional. Those accounts are profitable to the bank.”

In December, the bank took out $1,410 to pay her property insurance, even though she had paid her insurance for the year. This created a negative balance.

Zahran only found out that the bank had created the account when it began taking higher amounts out of her credit union account in January 2020. Zahran complained, but the bank insisted that she had contracted for the escrow account. She asked to have that call played back to her, but the bank said no.

The complaint claims, “Meanwhile, BofA has refused to remove the escrow while requiring her to endure phone calls of up to three hours in length that consist in large part of hold time, and that on more than one occasion end with her being placed on hold again in order to be transferred to a separate ‘back office’ ‘escrow department,’ with BofA then hanging up on her rather than actually transferring her over.”

The complaint alleges violations of the Electronic Funds Transfer Act (EFTA), breach of contract, and violations of state laws, among other things.

A class and two subclasses have been proposed for this action.

  • The class is all borrowers who had mortgage loans serviced by Bank of America, NA, between August 3, 2016 and the present.
  • Subclass 1 is all borrowers who had mortgage loans serviced by Bank of America, NA and who had a mortgage escrow account created after August 3, 2016.
  • Subclass 2 is all borrowers who had mortgage loans serviced by Bank of America, NA who had a change in their mortgage escrow account automatic debit amount after August 3, 2016.
Article Type: Lawsuit
Topic: News

Most Recent Case Event

Bank of America Unauthorized Escrow Account Complaint

August 3, 2020

Bank of America is a large entity, with a portfolio of outstanding consumer loans worth $236 billion. But the complaint for this class action alleges that the bank sells consumers add-on products with their mortgages that they do not want. In addition, the complaint says, it may be difficult for consumers to get rid of these products once they have been attached to their mortgages.

Bank of America Unauthorized Escrow Account Complaint

Case Event History

Bank of America Unauthorized Escrow Account Complaint

August 3, 2020

Bank of America is a large entity, with a portfolio of outstanding consumer loans worth $236 billion. But the complaint for this class action alleges that the bank sells consumers add-on products with their mortgages that they do not want. In addition, the complaint says, it may be difficult for consumers to get rid of these products once they have been attached to their mortgages.

Bank of America Unauthorized Escrow Account Complaint
Tags: Mortgage-Related Unfair Practices, Opening unauthorized accounts, Your Bank