The 2017 Bank of America settlement and what it covered

In 2017, Bank of America agreed to a settlement in a class action lawsuit over how it handled loan modification requests during and after the 2008 financial crisis. The lawsuit alleged that the bank lost documents, missed important date, and denied modifications to borrowers who should have may have access to. The settlement required Bank of America to pay $714 million and provide relief to borrowers who had been harmed by these practices.

The settlement covered borrowers who applied for loan modifications between 2009 and 2014 and were either denied or never received a decision. If you were one of these borrowers, you may have been part of the class without having to file a claim yourself — the bank was required to identify affected customers from its own records.

This was not a case where borrowers had to prove they were wronged. The settlement assumed that certain groups of borrowers had been treated unfairly based on what the bank's own documents showed about how it processed requests.

Key Takeaways

  • Bank of America paid $714 million to settle claims that it mishandled loan modification requests between 2009 and 2014.
  • The settlement covered borrowers who were denied modifications or never received a decision, without requiring them to file individual claims.
  • Payments were distributed in different amounts depending on the type of harm — some borrowers received cash, others received principal reduction on their loans.
  • The settlement period has closed, but you can still find out whether you received payment by contacting the settlement administrator or Bank of America directly.

Who was included in the settlement

The settlement covered borrowers in three main groups. The first group included people whose loan modification requests were denied without proper review. The second group included borrowers whose requests were lost or delayed so long that they were eventually denied. The third group included borrowers who were approved for temporary modifications but never received permanent ones.

You did not have to submit a claim to be included. Bank of America identified borrowers from its internal records and the settlement administrator mailed notices to known addresses. If the bank could not locate you, the settlement still set aside money in case you came forward later.

The settlement applied only to mortgages on primary residences, not investment properties or second homes. It also applied only to loans that Bank of America itself serviced — not loans that had been sold to other companies.

What borrowers received under the settlement

Payments varied depending on what happened to each borrower's request. Some borrowers received direct cash payments, ranging from a few hundred dollars to several thousand. Others received principal reduction on their loan balance — meaning the amount they owed was lowered. A third group received loan modifications that should have been granted in the first place.

The settlement administrator determined which borrowers fell into which category based on Bank of America's records of what went wrong with each request. Borrowers did not choose between options — the type of relief was assigned based on the harm documented in the file.

If you were supposed to receive a payment and did not, or if you are unsure whether you were included, you can contact the settlement administrator. The settlement has closed to new claims, but the administrator can still provide information about what you received or why you were not included.

How to learn about you received settlement money

The settlement administrator sent notices by mail to borrowers' last known addresses. If you received a notice, it explained what form of relief you were may have access to to and when to expect it. Payments were distributed over several years following the settlement approval.

If you did not receive a notice or are unsure whether you were part of the settlement, you can contact Bank of America's customer service and ask whether your loan was included in the 2017 loan modification settlement. Have your loan number or the property address ready. You can also contact the settlement administrator directly — the name and contact information were included in any notices sent at the time.

If you moved and did not receive a notice, the settlement administrator may still have a record of you. Some settlement funds remain unclaimed years after distribution, and administrators maintain records of who was may have access to to payment.

What this settlement did not cover

This settlement applied only to loan modification requests made between 2009 and 2014. If your request was made before 2009 or after 2014, it was not covered by this particular settlement. Bank of America has faced other lawsuits and settlements over mortgage practices, so it is possible your situation was addressed in a different case.

The settlement also did not cover borrowers who successfully received loan modifications but believed the terms were unfair. It covered only borrowers who were denied or whose requests were mishandled — not borrowers who disagreed with the modification they received.

If you lost your home to foreclosure and believe it should not have happened because your modification request was wrongly denied, this settlement may have addressed your situation. However, the settlement did not reverse foreclosures or return homes to borrowers.

When you might need a lawyer about this settlement

Most borrowers did not need a lawyer to receive settlement money — the settlement administrator handled distribution automatically. However, a lawyer can help if you believe you were wrongly excluded from the settlement or if you received less than you should have.

If you have questions about whether a different Bank of America mortgage lawsuit or settlement applies to your situation, a lawyer who handles mortgage disputes can review your loan history and explain your options. Some lawyers work on contingency for mortgage cases, meaning they take a percentage of any recovery rather than charging an upfront fee.

You should also consult a lawyer if you are currently in a dispute with Bank of America over a loan modification request, a foreclosure, or any other mortgage matter. This 2017 settlement does not prevent you from pursuing other claims if you have been harmed by the bank's actions.

Other Bank of America mortgage settlements and lawsuits

Bank of America has settled multiple mortgage-related lawsuits over the years. In 2012, the bank agreed to a much larger settlement with the federal government and state attorneys general over mortgage servicing practices and foreclosure abuses. That settlement required the bank to pay $25 billion and provide direct relief to borrowers.

The 2017 loan modification settlement was narrower in scope — it focused specifically on how the bank handled modification requests, not on all servicing practices. If you were harmed by foreclosure practices, improper fees, or other servicing issues, a different settlement may have covered your situation.

Because mortgage settlements often have different coverage periods and different types of harm they address, it is worth asking Bank of America or a lawyer whether you may have been included in more than one settlement.

Frequently Asked Questions

Can I still file a claim for the 2017 Bank of America loan modification settlement?

No, the settlement period for filing new claims has closed. However, if you were identified by the bank as part of the class, you should have received payment even without filing. If you believe you were wrongly excluded, contact the settlement administrator or a lawyer who handles mortgage settlements.

What if I received a payment but think it was too small?

The settlement administrator determined payment amounts based on Bank of America's records of what happened to your request. If you believe the records were incomplete or inaccurate, you can contact the administrator to ask how your amount was calculated. A lawyer can also review your loan file to determine whether you have grounds to challenge the calculation.

Does this settlement affect my current loan with Bank of America?

If you received principal reduction as part of the settlement, that reduction was applied to your loan balance. If you received a loan modification, that became your current loan terms. If you received a cash payment, it did not change your loan terms unless you used it to pay down your balance. Your current loan status is separate from the settlement.

What if my loan was sold to another company after the settlement?

The settlement applied to loans that Bank of America serviced at the time of the settlement. If your loan was sold or transferred to another servicer after you received settlement relief, the relief you received remains in effect. The new servicer must honor any modifications or principal reductions that were part of the settlement.

Can I sue Bank of America separately for the same loan modification issues?

By accepting settlement money or relief, you generally waived the right to sue Bank of America separately for the same harm covered by the settlement. However, you may still have claims for other mortgage-related harm not covered by this particular settlement. A lawyer can review your situation to determine what claims, if any, remain available to you.