The Bank of America Settlement and Who It Covered

In 2018, Bank of America agreed to pay $714 million to settle claims that it mishandled loan modification requests from homeowners between 2009 and 2014. The lawsuit alleged that the bank denied modifications to borrowers who should have been approved, lost documents, failed to respond to requests, and charged fees during the modification process. The settlement did not require Bank of America to admit wrongdoing.

The settlement covered homeowners who applied for loan modifications during that five-year window and were either denied or received a modification that was worse than what they should have received under the bank's own guidelines. Not every homeowner who applied may have access to for payment—the settlement had specific criteria based on the type of denial or the terms of the modification granted.

This was a class action lawsuit, meaning many homeowners were included as a group rather than filing individual claims. The settlement created a claims process where affected homeowners could submit documentation to prove they fell into one of the covered categories.

Key Takeaways

  • The settlement covered loan modification denials and unfavorable modifications between 2009 and 2014, with payment amounts varying based on the type of harm.
  • Homeowners had to submit a claim with documents proving they applied for a modification and were denied or received worse terms than they should have.
  • The claims period for this settlement has closed; homeowners who did not submit by the important date cannot recover money from this particular settlement.
  • If you were denied a modification or received one with poor terms during this period, you may have other legal options depending on your situation and state.
  • Settlement payments came from Bank of America's funds, not from a government program, and were distributed to claimants who met the settlement's specific requirements.

What the Settlement Covered and Payment Amounts

The settlement divided homeowners into categories based on what happened to their modification request. Homeowners who were wrongfully denied a modification could receive between $1,500 and $125,000 depending on the circumstances—the amount reflected how much harm the denial caused, calculated using factors like how long they were in default, whether they lost their home, and what their financial situation was at the time.

Homeowners who received a modification but with worse terms than Bank of America's guidelines allowed could also recover money. These payments were typically smaller, ranging from a few hundred to several thousand dollars, because the homeowner did receive some relief even if it was not optimal.

A third category covered homeowners who paid fees they should not have been charged during the modification process. The settlement required Bank of America to refund those fees plus interest.

The total settlement fund of $714 million was divided among all approved claims. If more homeowners submitted valid claims than the fund could cover, each payment would be reduced proportionally. The settlement administrator tracked claims and distributed funds accordingly.

How the Claims Process Worked

To receive payment, homeowners had to submit a claim form to the settlement administrator before the important date. The important date for submitting claims in this settlement has already passed—it was set years ago when the settlement was first approved. Homeowners who did not submit by that date cannot recover from this particular settlement.

The claim required proof that you applied for a modification, documentation of the denial or the terms you received, and evidence of your financial situation at the time. Bank of America's records were used to verify the claim, but homeowners often had to provide their own copies of correspondence, loan documents, and financial statements because bank records were sometimes incomplete or lost—which was part of the original complaint.

The settlement administrator reviewed each claim and determined whether it met the criteria for payment. Homeowners received a decision letter explaining whether their claim was approved, partially approved, or denied, and the reason why.

What Happened After the Claims important date

Once the claims period closed, the settlement administrator calculated the total amount owed to approved claimants and distributed payments. Some homeowners received checks; others had payments applied directly to their mortgage account if they still had a loan with Bank of America. The distribution took several months because the administrator had to process thousands of claims.

If you believe you should have been included in this settlement but missed the important date, you cannot reopen a claim under this particular settlement. However, you may have other options depending on what happened with your loan and where you live.

Other Legal Options If You Were Denied a Modification

Loan modification denials have been the subject of multiple lawsuits and regulatory actions beyond the Bank of America 2018 settlement. If you were denied a modification by Bank of America or another lender after 2014, or if you believe you have additional claims beyond what this settlement covered, you may be able to pursue other remedies.

Some states have their own laws protecting homeowners in modification disputes. You can contact your state's attorney general's office or a housing counselor to learn whether your situation falls under state-level protections. HUD-approved housing counselors offer free guidance on modification denials and can sometimes help you reapply or challenge a denial.

If you are considering legal action, an attorney who handles mortgage disputes can review your loan documents and correspondence with the bank to determine whether you have a claim. Many attorneys who handle these cases work on contingency, meaning they are paid only if you recover money.

How This Settlement Fit Into Broader Bank Enforcement

The Bank of America settlement was one of several major enforcement actions against large lenders for mishandling loan modifications after the 2008 financial crisis. Other banks, including Wells Fargo, JPMorgan Chase, and Citigroup, faced similar lawsuits and settlements for denying modifications or losing documents.

These settlements reflected a pattern: during the housing crisis, many lenders were overwhelmed with modification requests and did not have systems in place to handle them fairly. Some homeowners were told their applications were denied when they were actually still being reviewed. Others submitted documents multiple times because the bank lost them. Still others were offered modifications with terms that violated the bank's own guidelines.

The settlements required banks to pay homeowners who were harmed and, in some cases, to change their modification processes going forward. However, the settlements did not undo the foreclosures that occurred or restore homes that were lost.

What to Do If You Think You may have access to

If you applied for a loan modification from Bank of America between 2009 and 2014 and were denied or received unfavorable terms, and you did not submit a claim to the settlement, your options are limited. The claims important date for this settlement has closed, and you cannot file a late claim.

However, you can contact Bank of America directly to ask whether you have any outstanding claims or whether the bank has records of your modification request. You can also reach out to a HUD-approved housing counselor, who can review your loan history and advise you on whether you might have other remedies available under state law or through other legal channels.

Keep any documents you have related to your modification request—loan statements, correspondence with the bank, denial letters, and proof of payments. These documents are valuable if you pursue any other legal action or if you want to understand what happened with your loan.

Frequently Asked Questions

Can I still file a claim for the Bank of America 2018 settlement?

No. The claims important date for this settlement closed years ago. You cannot submit a new claim or reopen an old one under this particular settlement. If you believe you were harmed by Bank of America's modification practices, you may have other legal options depending on your situation and state law.

How much money did people actually receive from this settlement?

Payment amounts varied widely based on the type of harm. Homeowners wrongfully denied modifications received between $1,500 and $125,000. Those who received unfavorable modifications typically received smaller amounts. The exact payment depended on individual circumstances and the total number of approved claims.

What if Bank of America denied my modification after 2014?

This settlement only covered denials between 2009 and 2014. If your denial occurred after that period, you would not be covered by this settlement. You may have other legal options depending on your state's laws and the circumstances of the denial. A housing counselor or attorney can review your situation.

Do I need a lawyer to understand whether I may have access to for this settlement?

The settlement process has already concluded, so a lawyer cannot help you recover from it. However, if you want to explore other legal options for a modification denial, an attorney who handles mortgage disputes can review your case. Many offer free initial consultations.

Where can I find information about other loan modification settlements?

The Consumer Financial Protection Bureau (CFPB) maintains information about settlements with financial institutions. Your state's attorney general's office may also have details about settlements affecting homeowners in your state. A HUD-approved housing counselor can point you to current resources and programs.