A Las Vegas real estate broker who specializes in foreclosures has found himself on the other side of the table. And now he’s suing.
In an amended federal lawsuit over alleged fraud and violations of federal credit and debit collections practices, Michael Bondi says one of the nation’s largest banks improperly sold a foreclosure loan with a zero balance, only to have a new mortgage lender try to collect a debt that no longer existed.
The updated complaint, filed last month in U.S. District Court in downtown Las Vegas, claims that in 2013, Bank of America sold the realtor’s zero balance loan to Nationstar Mortgage, which then improperly reported $70,000 of debt from a foreclosure resulting in “major derogatory/charge off” items being placed on a credit report.
In his lawsuit, which was filed in 2014, Bondi said he is seeking more than $1 million plus legal fees.
“They wreak havoc on your life financially, and the toll is physically and mentally draining,” Bondi said. “All the phone calls lasting for at least an hour. I kept asking myself, ‘when is this going to stop?’ “
Bondi is a well-known real estate broker in Las Vegas who built a practice focusing on short sales and foreclosures. He appeared on HGTV’s House Hunters Las Vegas reality show.
Bondi has a page on his website announcing his Bank of America lawsuit, where he “strongly” suggests “if you have been a victim of Bank of America and Nationstar Mortgage … contact legal counsel and make sure your rights are protected.” He and his attorney, Rebecca Fuller with Fuller Law Practice in Las Vegas, have been considering seeking class action status for their lawsuit.
At the time Bondi’s home was foreclosed, he had two mortgages totaling more than $314,000, with only the second loan, valued at about $69,371, being transferred to Nationstar Mortgage.
“Due to active litigation, we cannot respond to the specifics of this case,” Bank of America said in a statement emailed to the Las Vegas Business Press. “When there are two loans on a property and the first loan forecloses, the balance of second loan is not affected by the foreclosure and remains due and owing. A second loan would generally remain active, even after a foreclosure on the first loan.”
But, Bondi argues that he didn’t owe the second mortgage because Bank of America had closed the account and said he did not have an outstanding balance, according to the lawsuit.
Bondi’s lawsuit claims the negative items being placed on his credit report damaged his credit, his business and his reputation when Bank of America implied Bondi made fraudulent representations on his original loan applications.
Fuller said her client has credit reports and letters from the financial institutions assuring him that he didn’t owe them any money, “only to find out the dead and buried debt resurfaced when Bank of America improperly sold the loan to Nationstar.”
Bondi’s 10-page lawsuit claims Bank of America N.A. and Nationstar Mortgage LLC committed fraud, civil conspiracy, misrepresentation, and violations of the Federal Fair Credit Reporting Act and the Federal Fair Debt Collections Practices Act.
“This has impacted every aspect of his financial life,” Fuller said in a statement.
Bondi’s problems with Bank of America began in 2008 when the Charlotte, N.C. –based bank took over his two mortgages from Countrywide Home Loan. He admits he was unable to pay his mortgage after a car accident in 2007 left unable to work and with no savings.
Bondi claimed Bank of America blocked his multiple efforts to short sale his home because he would not sign a blank promissory note. Bondi’s home, which had a first and second mortgage valued at $314,064, was ultimately foreclosed on June 4, 2009.
Then property was sold for $160,565, leaving a debt of approximately $153,499. Almost $70,000 was due on the second mortgage, according to the lawsuit.
Bondi’s suit claims Bank of America agreed not to seek collection on the balance, but inaccurately reported the account to credit reporting agencies as an “open foreclosure” and reported that Bondi was 180 days late on payments.