Facts

Richard Horn and Maria Gurevich filed a putative class action against Bank of America N.A. in connection with Bank of America's practice of permitting borrowers to defer payments of accrued interest on their option adjustable rate mortgages until months or years later.

PLAINTIFFS' CONTENTIONS:
Plaintiffs contended that Bank of America failed to report on Form 1098 the payments paid by Option ARM borrowers' on deferred interest in their alleged claims for tax years 2009 through 2011. breach of contract; negligence per se; negligent misrepresentation; intentional misrepresentation; unfair business practices; and declaratory judgment.

DEFENDANT'S CONTENTIONS:
Bank of America denied any liability.

Result

The parties agreed to settle the dispute. As part of the settlement, Bank of America agreed to, among others, pay each eligible class member an amount equivalent to 75 percent of the tax deduction value of his or her payments of deferred interest in tax year 2009. For payments made in tax years 2010, 2011, and 2012, Bank of America agreed to file amended Forms 1098, and will provide eligible members a copy for any amended for 1098. Bank of America also agreed to pay $40 for each amended Form 1098 to help defray any costs of filing amended tax returns.