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Bank of America sued for breach of contract and fraud over foreclosed homes

NationalMortgageProfessional.com
Jun 21, 2010

Burkhalter Kessler Goodman & George (BKGG), attorneys for Diversified Field Solutions Inc. (DFS), a provider of property preservation services for foreclosed homes, has filed a lawsuit against Bank of America alleging, among other things, breach of contract and fraud. BAC contracted with DFS to render property preservation services to foreclosed BAC properties in 14 states. DFS alleges that it has been damaged by BAC's failure to uphold terms of the contract. Based on the scope of the contract, DFS invested nearly $2 million of its own resources in preparation to perform its obligations under the contract. However, it is alleged that BAC never upheld its side of the contract by failing to allocate the work to DFS that was promised thereby resulting in huge financial losses to DFS and ultimately devastation of the company. DFS is also alleging that BAC damaged DFS' reputation when BAC sent erroneous instructions to DFS to enter a home which was already re-sold and occupied by the new owner. In the resulting news coverage, BAC blamed DFS for the error and halted all further work assignments. DFS has since been forced to layoff nearly all of its office staff and is no longer able to provide jobs to more than 300 of its field workers. "At all times, DFS acted in good faith to meet its contractual obligations with BAC in a timely and professional manner," said Taymor Niazi, senior vice president of DFS. "Banks are required by law to prevent foreclosed homes from becoming blights to their communities. They hire small companies like ours to do the actual work needed to comply with this requirement. But in doing so, BAC has ignored the terms of its own contract to the detriment of our business and workers." "BAC's failure to follow through on its obligations to DFS is yet another example of unscrupulous behavior from banks in the face of this nation's mortgage meltdown," said Eric Goodman, partner with the law firm of BKGG. "Homeowners are not the only victims of this crisis; it extends to firms like DFS and onward to the mom-and-pop businesses who actually mow the lawns and clean the countless homes that now sit empty." For more information, visit www.bkgglaw.com.  
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