BERKELEY'S NEWS • OCTOBER 01, 2022

UC law schools awarded damages after wrongful foreclosure by Bank of America

article image

PHILLIP DOWNEY | FILE

SUPPORT OUR NONPROFIT NEWSROOM

We're an independent student-run newspaper, and need your support to maintain our coverage.

APRIL 03, 2017

A federal bankruptcy judge awarded $45 million in punitive damages — much of which will go to UC law schools — to a Sacramento couple March 23 in a ruling that found that Bank of America unlawfully foreclosed on their house.

The judge ruled the couple will give each of the five campuses — UC Berkeley School of Law, UC Davis School of Law, UC Hastings College of Law, UCLA School of Law and UC Irvine School of Law $4 million of the punitive damages. The couple will receive more than $1 million in actual damages.

Additionally, the judge ruled the couple will give $10 million of the punitive damages to both the National Consumer Bankruptcy Rights Center and the National Consumer Law Center.

According to court documents, the couple had filed a chapter 7 bankruptcy case to clear debt, thus enhancing their ability to pay Bank of America on a modified loan. After completion of the chapter 7 case, the couple was given no credit for their improved debt profile. The couple was then faced with “imminent foreclosure,” causing them to file for a chapter 13 case in order to move forward with loan modification.

Bank of America expressed their understanding that their performance in this foreclosure was not satisfactory and that they have since changed their processes in a public statement.

“We believe some of the court’s rulings are unprecedented and unsupported, and we plan to appeal,” the statement from Bank of America said.

Campus assistant law professor Prasad Krishnamurthy said he would be surprised if Bank of America did not appeal. He added that he believes that this case showcases the disarray in the housing market.

“Multiply the experience of this couple by 10, 20, 30 million. That’s … the experience of many people,” Krishnamurthy said. “The case is kind of illustrative of the (situations of) many million people who (owned) homes from the period of 2008 to 2012.”

Contact Ishira Shrivatsa at 

LAST UPDATED

APRIL 04, 2017


Related Articles

featured article
Instead, items up for bidding included everything from tapestries to a George Foreman Grill — the wine had already been sold for $3.6 million in September.
Instead, items up for bidding included everything from tapestries to a George Foreman Grill — the wine had already been sold for $3.6 million in September.
featured article
featured article
A settlement decision on the Premier Cru class action lawsuit was reached May 16, affecting approximately 4,450 Premier Cru customers who were left without the bottles of wine they paid for before the company declared bankruptcy Jan. 8.
A settlement decision on the Premier Cru class action lawsuit was reached May 16, affecting approximately 4,450 Premier Cru customers who were left without the bottles of wine they paid for before the company declared bankruptcy Jan. 8.
featured article
featured article
A U.S. Superior Court judge ruled Tuesday that the victims of last year’s Downtown Berkeley balcony collapse accident may press for punitive damages against the building’s owner, manager and construction company.
A U.S. Superior Court judge ruled Tuesday that the victims of last year’s Downtown Berkeley balcony collapse accident may press for punitive damages against the building’s owner, manager and construction company.
featured article