Michael Bondi is no stranger to foreclosures. He’s a real estate broker in town and has even appeared on HGTV’s "House Hunters Las Vegas" reality show.
But after about a decade of guiding clients through the home ownership and bank repossession processes, he’s found himself in a foreclosure nightmare of his own that has snowballed into him filing a federal lawsuit against Bank of America and Nationstar Mortgage on claims of fraud and violations of credit and debt laws.
Bondi is seeking $1 million in damages plus attorney fees.
He said his ordeal began in 2006 when he took out two loans totaling more than $314,000 after purchasing a home in the southwest valley. In 2007, he said, he was involved in a car accident that left him unable to work and depleted much of his savings. His home was foreclosed on in 2009, rendering the first loan inactive.
The second loan, valued at about $70,000, remained open. Bondi said he successfully solicited several short-sale offers on the home, but Bank of America rejected them. After Bondi threatened to sue for alleged violations against the RESPA Act, which protects consumers from high settlement charges, he claims the bank zeroed out his balance on the second loan in 2010 as long as he would not take them to court.
“They (Bank of America) said, 'We want to be done with this,'” Bondi said.
A spokesperson for Bank of America declined to comment on whether the bank agreed to waive the balance of the loan.
Bondi said that in 2013 he received a notice from Bank of America stating that the bank had transferred his second loan to Nationstar Mortgage. Believing the loan no longer existed, Bondi said he was perplexed by the notice.
He also said that according to NRS 40.455, which outlines legal practices for deficiency judgment, it was long past the due date for Nationstar to collect on his loan.
The statute states, “If the indebtedness is secured by ... more than one mortgage ... the 6-month period begins to run after the date of the foreclosure sale ... but in no event may the application be filed more than 2 years after the initial foreclosure sale or trustee’s sale.”
Bondi said Nationstar violated the statute by trying to collect on his loan four years after his home was foreclosed on.
Meanwhile, the debt was placed on his credit report.
“I don’t have credit because the credit card companies are afraid I’m some bad credit risk,” Bondi said.
He said that in a phone call with Bank of America in 2013, the bank confirmed that his second loan had a zero balance. Bondi possesses a recording that he offers as verification of that conversation. He says he has recordings of calls with individuals from Nationstar and other companies who also said he owed no money on the loan.
Bondi filed his lawsuit a year later, claiming fraud, civil conspiracy, misrepresentation and violations of the Federal Fair Credit Reporting Act and the Federal Fair Debt Collections Practices Act. The case is pending in U.S. District Court, where a judge has set a deadline in January for both sides to assemble their documentation, depositions and other information.
“Due to the active litigation, we cannot respond to the specifics of this case beyond what is in the public record,” Bank of America said in a statement. “Generally, when there are two loans on a property and the first loan forecloses, the balance of the second loan is not affected by the foreclosure and its obligations remain intact. A second loan generally remains active, even after a foreclosure on the first loan.”
Since filing the lawsuit, Bondi has created a website and Twitter account detailing his ordeal.
“I want to educate people,” he said. “I want people to check their credit report and see if they’re paying money they don’t owe. They need to educate themselves on what banks can and cannot do.”
An attorney for Bank of America — who's also listed in court documents as Nationstar's counsel — did not return a phone call. An email seeking comment from Nationstar was not returned, and efforts to reach a spokesperson for the company by phone were unsuccessful.
Editor's note:This story has been revised to correct an error involving the timing of the purchase of Bondi's home. He bought the home in 2006. Also, the original version did not contain information regarding Bondi's recordings of phone conversations and his claim that he received short-sale offers on his home.