Bank Of America Will Give You $500 For Kicking Someone Out Of Their House

Cyber attack on Bank of America?  @ NYT

Bank of America has managed to make the news yet again, but not for the right reasons. According to several ex-employees, Bank of America systematically declined homeowners the ability to modify their loans under the government’s Home Affordable Modification Program, or HAMP. Bank of America rewarded staff with various perks, including cash bonuses and gift cards, for meeting quotas by sending homeowners seeking loan modifications into foreclosure. With these new explosive allegations, a new lawsuit is being brought against Bank of America. The former employees’ testimonies and revelations will strengthen the lawsuit, which is a consolidation of 29 separate suits against the bank from across the United States and is seeking class action certification. According to court documents, the lawsuit is being brought by homeowners who didn’t receive permanent loan modifications after meeting their obligations under the trail programs.

According to Bank of America spokesman Rick Simon:

“At best, these attorneys are painting a false picture of the bank’s practices and the dedication of our employees. While we will address the declarations in more depth when we file our opposition to the plaintiffs’ motion next month, suffice it to say that each of the declarations is rife with factual inaccuracies.”

However, this isn’t the first time Bank of America has been in hot water related to mortgage fraud. Bank of America is one of 5 mortgage servicers that reached a 25 billion settlement last year in relation to fraudulent foreclosure practices.

According to an ex- Bank of America employee, Simone Gordon:

“We were regularly drilled that it was our job to maximize fees for the bank by fostering and extending delay of the HAMP modification process by any means we could. Managers instructed staff to delay modifications by telling homeowners who called in that their documents were ‘under review,’ when in fact, there had been no review.”

According to Gordon, employees who put homeowners into foreclosure, including those going through the modification program, would receive cash bonuses of up to 500 dollars. In other instances, employees would receive gift cards to various restaurants and retailers.

Here rises the major problem with incentives and for-profit banking. Large banks, usually those that are “too big to fail,” systematically disenfranchise their customers while appearing to help them. The banks don’t care about the lives they are affecting. To the bean counters, these families are mere numbers on a spreadsheet. Therefore, this kind of behavior is allowed to run rampant. The goals of the banks were never to help customers. According to another ex-employee from Bank of America, Theresa Terrelonge:

“I witnessed employees and managers change and falsify information in the systems of record, and remove documents from homeowners’ files to make the account appear ineligible for a loan modification. This allowed managers to meet quotas for closed cases.”

In an official statement to a federal court, ex-manager William Wilson recounts the institutionalized fraud occurring in the home modification department at Bank of America.

“Bank of America employed a common strategy of delaying HAMP applications. Delay was achieved using tactics including claiming that documents were incomplete or missing when they were not, or simply claiming the file was “under review” when it was not. We were instructed to delay and then push homeowners to accept an internal refinance so that Bank of America would profit. Once an applicant was finally rejected after a long delay, the bank would offer them an in-house alternative. Bank of America would charge a higher interest rate ranging up to 5 percent as compared to 2 percent if the loan had been modified under HAMP. The unfortunate truth is that many and possibly most of these people were entitled to a HAMP loan modification, but little choice but to accept a more expensive and less favorable in-house modification.”

What we see here is Bank of America creating their own profits and going around government regulations. Most of the time individuals who were denied their permanent modification lost their houses. Bank of America even conducted a bi-monthly “blitz” where they would decline between 600-1,500 modification files at a time. Clearly, this isn’t about people who shouldn’t have had these houses in the first place; this is about one member of a massive banking cartel dictating the future of innocent Americans who often times qualified for the government HAMP program.

These commands came straight from the top. According to Wilson, Patrick Kerry, the Vice President who oversaw the entire eastern regions loan modification process, endorsed and encouraged these actions. It was all about the quotas and the bottom line. Even employees who feared what they were doing was unethical were afraid to speak out. Wilson also said in his official statement to the court:

“Employees feared for their jobs. If an employee questioned the ethics of Bank of America’s practice of declining modifications for false and fraudulent reasons [they] were often fired.”

Wilson also suffered from this kind of coercion and was ultimately fired after raising concerns about the banks shady practices.

So long as these banks remain “too big to fail,” we will continue to see these high levels of corruption, fraud and abuse. Banks will continue to run around government regulations with impunity. They will continue to reward fraud and force their employees to partake in their dirty work. It is about time someone breaks the big banks up. The profits of a few don’t outweigh the needs of the many. HAMP is a program designed to run through private institutions in order to help alleviate homeowners who need help staying in their homes. However, if the government insists on letting the fox guard the hen-house nothing will ever change.