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.