Bank Of America Claims Death of Child Not a Hardship

by 12 Oct 2012

By now, I should be numb to the suffering caused by Bank of America and other large lenders and mortgage servicers. That’s what they want but instead, I am fighting angry. So are millions of homeowners too. If you think we climb the soapbox a little too often in this blog, read this story first and then make your own decision.

The genesis of this story is a lawsuit filed in the Orange County Superior Court. Noel and Debra Lesley filed suit against Bank of America, Ocwen Financial and Litton Loan Servicing earlier this year claiming breach of contract, intentional infliction of emotional distress and violation of California’s Business Code. The facts will shock you.

The Lesleys fell behind on their mortgage payment after their child became extremely ill. They had to cash in their life savings in an attempt their son’s life. Ultimately, their efforts failed and their boy died.

Notwithstanding that they were broke, the Lesleys didn’t ask for a forbearance of any amount of the loan. Instead, they asked to participate in a loan modification program designed to let people with hardships remain in their homes. They owed $350,000 on a home that was now worth probably half that. Not an uncommon occurrence in Southern California. If the hardship modification was granted, the Lesleys could stay in their home, get back on their feet and the investor who owned the note would be made whole. Makes sense, right?

The obvious answer was apparently not so obvious to Litton and Bank of America.

The Lesleys say Litton (on behalf of Bank of America) wrote to them denying their modification and told them that the tragic death of their son and the enormous medical bills they incurred trying to save his life was not a “true hardship.”

The alternative to modification was foreclosure. Proceeding with foreclosure would leave the Lesleys homeless and leave the bank with a fraction of what was owed on the mortgage as the house worth far less than the mortgage. In the words of Noel and Debra, “There was and is no justification, either in law, in common business sense, or basic humanity for the decision Litton and Bank of America took other than to cause as much emotional pain to Plaintiffs as possible.”

Much of the rest of the complaint documents the common banking ploys of promising modifications but later declining them, losing paperwork, etc.

We hope that Noel and Debra prevail. California judges have been reluctant to allow homeowners to sue for the denial of loan modifications but the facts of this case should make even the most conservative judge wince.

The banking folks removed this case to federal court. Why? Because they know what will happen if a local Orange County jury heard this case. Even Treasury Secretary Tim Geithner couldn’t run the printing presses fast enough to generate enough cash to pay off the probable jury award.

We write these stories to educate everyone and provide hope. People can and do fight back. We would tell you that they often win as well, however, almost every case that settles does so with a confidentiality provision or order. In other words, the banks don’t want the public to find out when they pay hush money to bury their mistakes.

About the Author. Brian Mahany is an attorney with a nationwide practice concentrating in lender liability. He represents victims of banking and foreclosure fraud. He welcomes comments and questions and can reached by email at


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