Bank of America urges dismissing robo-signing suit

* Bank says no showing of racketeering violations

* Plaintiffs say foreclosure based on perjured affidavits

By Jonathan Stempel

NEW YORK, Nov 11 (BestGrowthStock) – Bank of America Corp (BAC.N: )
has urged a federal judge to throw out a racketeering lawsuit
over its alleged use of “robo-signers” in foreclosures.

The largest U.S. bank said the Indiana plaintiffs, who lost
their home to foreclosure in 2009, failed to show they were
harmed by its alleged practice of routinely submitting perjured
affidavits, given they might have lost their home anyway.

It also said the plaintiffs do not deserve relief against
Bank of America and its Countrywide Home Loans unit under a
federal debt collection law because foreclosures are intended
to protect lenders’ interest in homes, not to collect debt.

Wednesday’s filing with the U.S. District Court in
Indianapolis provides an early glimpse into how lenders might
defend against the growing number of lawsuits over foreclosure
paperwork and securities backed by home loans. [ID:nN09101485]

Irwin Levin, a partner at Cohen and Malad LLP representing
the plaintiffs Dwayne and Melisa Davis, did not immediately
return a call seeking comment. The plaintiffs are seeking
class-action status on behalf of thousands of homeowners.

Many homeowners and their lawyers accuse robo-signers of
signing hundreds of foreclosure documents at a time on behalf
of lenders without having read or understood their contents.

On Thursday, real estate company RealtyTrac Inc said banks
foreclosed on 9 percent fewer homes in October than September
as paperwork issues stalled processing. [ID:nN11282708]

Since the controversy began to swell in September, lenders
such as Bank of America, JPMorgan Chase & Co (JPM.N: ), Wells
Fargo & Co (WFC.N: ) and Ally Financial Inc’s GMAC Mortgage have
revealed paperwork problems, froze foreclosures, or both.

U.S. investigators, including all 50 state attorneys
general, are examining whether banks prepared foreclosure
documents that were false or poorly reviewed in order to evict


In their Oct. 19 lawsuit, the Davises said they lost their
Knightstown, Indiana home prematurely because of false
affidavits from two robo-signers, including a nationally-known
“robo-signer extraordinaire.” They requested money damages.

But in its filing, Bank of America said that, by not trying
to upset their foreclosure, the Davises could not show any harm
caused by alleged inaccuracies in the underlying affidavits.

“Plaintiffs plead no facts to support their claim that the
result, i.e., a judgment of foreclosure, would have been any
different,” wrote Matthew Strzynski, a partner at Krieg DeVault
LLP representing the Charlotte, North Carolina-based bank.

Bank of America also said the law does not allow attacks on
state court foreclosure judgments in federal court even if
fraud is involved, and that the Davises waited too long by not
raising their claims until after they lost their home.

The case is Davis v. Countrywide Home Loans Inc et al, U.S.
District Court, Southern District of Indiana, No. 10-01303.
(Reporting by Jonathan Stempel in New York; editing by Andre

Bank of America urges dismissing robo-signing suit