Bank of America Mortgage Records: Lawsuits, Settlements, and Penalties

Bank of America has faced a long run of mortgage lawsuits and regulatory actions, including a 2025 wave of suits the bank itself filed against homeowners after mistakenly erasing their mortgages from public land records, active class actions over how it responds to borrower requests, and multibillion-dollar crisis-era settlements tied to loans it inherited from Countrywide Financial and Merrill Lynch.

The 2025 Lawsuits Against Homeowners Over Discharged Mortgages

The strangest recent chapter started with a cleanup project. When Bank of America bought FleetBoston Financial in 2004, it inherited roughly 16,000 mortgages that borrowers had fully paid off but that Fleet had never formally discharged from public records; Fleet had left that paperwork to customers. Years later, Bank of America set out to clear the backlog and, in the process, accidentally discharged hundreds of mortgages that were still active, where borrowers still owed money. The error affected mortgages across the country, not just in Massachusetts.¹

A discharged mortgage, in the eyes of public land records, no longer exists. The debt remains, but the security interest tying it to the house has been released. To fix that, Bank of America asked affected homeowners to sign new paperwork re-establishing the mortgage. When homeowners didn’t respond or refused, the bank sued.

In Massachusetts alone, Bank of America filed suit against more than 100 homeowners. Bank spokesman Bill Halldin told WBUR that “filing the lawsuits was the only way to ask the court to correct the record if homeowners didn’t voluntarily agree to the correction.” As of June 2025, the bank said it had resolved about three-quarters of those suits.¹

The bank said it would cover the costs of re-recording corrected documents at local registries and would pay for or reimburse notary fees. It drew criticism for refusing to reimburse homeowners for their own attorney fees for responding to the lawsuits.¹

At least one of these matters has produced a court ruling. In Bank of America v. Kozak, decided in the Norfolk Land Court in Massachusetts in 2024, the court granted the bank’s request for declaratory relief to set aside the mistaken discharge and reinstate the mortgage, in part because the borrower did not dispute the outstanding debt or the bank’s claim that the discharge was an error.²

If You’re a Homeowner Caught Up in This

Massachusetts law puts the usual burden the other way around. Under Chapter 183, Section 55 of the General Laws, a mortgagee or servicer must record a discharge or deliver it to the closing attorney within 45 days of receiving full payment. If it doesn’t, the lender is liable for the greater of $2,500 or actual damages, plus reasonable attorney fees, and after 45 days’ notice by certified mail a Massachusetts-licensed attorney can record a discharge on the borrower’s behalf.³ The Bank of America situation inverts that: the bank recorded discharges it shouldn’t have and is now trying to undo them.

One homeowner’s experience shows how the process has gone. Diane Jaques, a 75-year-old semi-retired insurance agent in Concord, Massachusetts, had opened a $200,000 home equity line of credit with Fleet in 2004 and continued paying Bank of America after the acquisition. In December 2024, a law firm representing the bank contacted her about the erroneous discharge. After months of back-and-forth and problems with the paperwork the bank provided, Bank of America filed suit against her in May 2025 and dropped the suit the following month after she signed the updated documents.¹

Attorney Mary Ann Driscoll told WBUR: “I’ve never heard of a bank prematurely discharging a mortgage. It’s very odd to say the least.”¹

Active Class Actions Over Mortgage Servicing

Separate from the discharge mess, Bank of America has faced class action claims that it mishandles routine borrower requests about their mortgages.

In January 2025, borrower Lynne Warshaw filed Warshaw v. Bank of America, N.A. (Case No. 0:25-cv-60136) in the U.S. District Court for the Southern District of Florida. The suit alleged that the bank routinely failed to respond to qualified written requests and notices of error from mortgage borrowers within legally required timelines. Specific claims included that the bank refused to give borrowers copies of recorded phone calls, sent response letters postmarked after the deadline despite being dated within it, and misled borrowers about response timelines. The suit alleged violations of the Real Estate Settlement Procedures Act and the Florida Consumer Collection Practices Act.⁴

Judge Rodney Smith granted Bank of America’s motion to dismiss on February 9, 2026. Warshaw’s individual claims were dismissed with prejudice; the class claims were dismissed without prejudice. Warshaw filed a motion for reconsideration in March 2026, which had been briefed by both sides as of that month.⁵

An earlier case, Robinson v. Bank of America, N.A. (Case No. 3:21-cv-00110), had been filed in the U.S. District Court for the Southern District of California in January 2021, raising comparable allegations about the bank’s refusal to provide call recordings and its rejection of electronic signatures on information requests.⁶

Regulatory Penalties and Older Settlements

$12 Million for False Mortgage Data (2023)

In November 2023, the Consumer Financial Protection Bureau ordered Bank of America to pay a $12 million civil penalty for reporting false mortgage data in violation of the Home Mortgage Disclosure Act and its implementing Regulation C. The consent order required new compliance policies, an improved HMDA compliance management system, and annual compliance reports. The CFPB terminated the order on June 5, 2025, finding that Bank of America had met its obligations.⁷⁸

$35 Million for Unpaid Escrow Interest in California (2019)

In 2019, Bank of America agreed to a $35 million class action settlement in Lusnak v. Bank of America, which alleged the bank had failed to pay interest on mortgage escrow accounts as required by California law. The settlement represented roughly 75% of the escrow interest the bank had allegedly withheld from California borrowers, and the bank began paying interest on all residential mortgage escrow accounts in California in 2019.⁹

$16.65 Billion DOJ Settlement Over Mortgage-Backed Securities (2014)

In August 2014, the Justice Department announced a $16.65 billion settlement with Bank of America over the sale of toxic mortgage-backed securities in the years leading up to the 2008 crisis. It was the largest civil settlement with a single entity in American history at the time. Bank of America admitted selling billions of dollars in risky mortgage-backed securities while concealing the quality of the underlying loans, and to making misrepresentations to Fannie Mae and Freddie Mac.¹⁰

The deal broke down into a $9.65 billion cash penalty and $7 billion in consumer relief, which included principal reductions, donations of foreclosed properties to community groups, and financing for affordable rental housing. The bank also agreed to pay up to $490 million to cover tax bills homeowners incurred from mortgage modifications. The settlement resolved most of the bank’s liabilities from its acquisitions of Countrywide Financial in July 2008 and Merrill Lynch six months later, but did not cover criminal claims or claims against individual executives.¹¹¹⁰

$25 Billion National Mortgage Servicing Settlement (2012)

In February 2012, Bank of America was one of five major mortgage servicers in the roughly $25 billion National Mortgage Settlement. It followed interagency examinations that found significant weaknesses in how the banks handled foreclosures, including robo-signing of documents and pursuing foreclosure against borrowers who were simultaneously being evaluated for loan modifications.¹² The settlement required the servicers to adopt more than 300 new servicing standards, including ending dual-tracking and establishing a single point of contact for borrowers, under three years of oversight by an independent monitor, North Carolina Commissioner of Banks Joseph A. Smith.¹³

$335 Million Countrywide Discrimination Settlement (2011)

In December 2011, the Justice Department and Illinois Attorney General Lisa Madigan announced a $335 million settlement with Countrywide Financial over discriminatory mortgage lending. Federal investigators found that Countrywide had charged more than 200,000 Black and Latino borrowers higher interest rates and fees than similarly creditworthy white borrowers, and had steered minority borrowers into riskier subprime loans when they qualified for traditional ones. Chicago-area data from 2006 showed 50.9% of African-American borrowers and 33.8% of Latino borrowers received high-cost loans, compared with 19.5% of white borrowers.¹⁴¹⁵

The DOJ attributed the disparities to company policies that gave employees and mortgage brokers “almost unlimited discretion” in selecting and pricing loans. It was described at the time as the largest residential fair lending settlement in history. Bank of America noted that the alleged conduct occurred before its acquisition of Countrywide and said the specific products and practices involved had been discontinued.¹⁴

OCC Enforcement Order on Servicing Practices (2011)

In April 2011, the Office of the Comptroller of the Currency issued a formal enforcement action against Bank of America for “unsafe and unsound practices” in residential mortgage loan servicing and foreclosure processing. The order required the bank to end dual-tracking, establish single points of contact for borrowers, improve oversight of outside law firms and vendors, hire an independent firm to review all foreclosure actions taken between January 2009 and December 2010, and set up a remediation process for borrowers who suffered financial harm from errors.¹²

A Recurring Record-Keeping Problem

What ties these actions together over more than a decade is a recurring theme: record-keeping failures, from robo-signed foreclosure documents to falsified HMDA data to accidentally erased mortgages. The 2025 Fleet episode is, in some ways, the most absurd version. A bank that spent years answering for sloppy paperwork in foreclosures managed to create an entirely new category of paperwork problem by accidentally telling the world that hundreds of active loans no longer existed.

1
WBUR. Bank of America Accidentally Discharged Hundreds of Massachusetts Mortgages, Then Sued Homeowners
2
Massachusetts Lawyers Weekly. Mortgages Discharge Error
3
General Court of Massachusetts. General Laws, Chapter 183, Section 55
4
Top Class Actions. Bank of America Class Action Alleges It Failed to Respond to Mortgage Loan Requests
5
PACER Monitor. Warshaw v. Bank of America, N.A.
6
ClassAction.org. Class Action Claims Bank of America Illegally Failed to Fulfill Written Information Request
7
Consumer Financial Protection Bureau. CFPB Orders Bank of America to Pay $12 Million for Reporting False Mortgage Data
8
Consumer Financial Protection Bureau. Bank of America, N.A. HMDA Data Enforcement Action
9
Law360. BofA to Settle California Mortgage Escrow Interest Suit for $35M
10
CNBC. Bank of America in $16.65B Mortgage Settlement
11
The New York Times DealBook. Bank of America Reaches $16.65 Billion Mortgage Settlement
12
OCC. OCC Takes Enforcement Action Against Bank of America for Unsafe and Unsound Mortgage Servicing Practices
13
Every CRS Report. The National Mortgage Settlement
14
NPR. BofA’s Countrywide Will Pay $335 Million in Lending Discrimination Case
15
Illinois Attorney General. Madigan, U.S. DOJ Reach $335 Million Settlement With Countrywide Bank of America Over Discriminatory Lending