Bank of America routinely denied qualified borrowers a chance to modify their loans to more affordable terms and paid cash bonuses to bank staffers for pushing homeowners into foreclosure, according to affidavits filed last week in a Massachusetts lawsuit.Read the rest here.
"We were told to lie to customers," said Simone Gordon, who worked in the bank's loss mitigation department until February 2012. "Site leaders regularly told us that the more we delayed the HAMP [loan] modification process, the more fees Bank of America would collect."
In sworn testimony, six former employees describe what they saw behind the scenes of an often opaque process that has frustrated homeowners, their attorneys and housing counselors.
They describe systematic efforts to undermine the program by routinely denying loan modifications to qualified applicants, withholding reviews of completed applications, steering applicants to costlier "in-house" loans and paying bonuses to employees based on the number of new foreclosures they initiated.
The employees' sworn testimony goes a long way to explain why the government's Home Affordable Modification Program, launched in 2008 during the depths of the housing collapse, has fallen so far short of the original targets to save millions of Americans from being tossed from their homes.
Bank of America denied the allegations in the affidavits, which were filed in a Massachusetts lawsuit on behalf of dozens of Bank of America borrowers in 26 states.
Banks are the enemy.
4 comments:
When my husband lost his job at the height of the crisis we filed for a loan mod with BofA. We were totally up to date on our payments. They kept putting off getting back to us. Repeatedly claimed to have lost our paperwork requiring to resend things. And then just over 3 months after our loan mod application we received a notice of foreclosure in the mail.
They cashed our checks and held them in another account not applying them to our mortgage until we met the requirement in our start for 3 mo delinquency to foreclose on. We finally get a real human being on the line who fixed things for us. I have no idea how or why because I know others were not so lucky.
But I will never feel secure in a home again. The stress to my health and my children and husband was outrageous particularly on top of a job loss. These people are cold hearted and evil and it makes me sick that this is who our government bails out and who we and our children will be paying for for who knows how many years.
Free markets for everyone!
Serious jail time. This is fraud of a serious order. While the whistleblowers should be given immunity, even low-level participation in these schemes should be punished.
Free markets for everyone!
Facile argument. The government and its central bank have a HUGE footprint in the mortgage market. Without it banks would be gladly taking haircuts. In fact, mortgages would be comparatively scarce, with the result that it would actually be possible to save up for a decent house.
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