Reject Loan Mods, Destroy Records, Escape Regulators...Profit!

In a group of sworn affidavits, former Bank of America employees have shown that Bank of America pushed their clients into foreclosure, instructing their employees to lie, and bribing them to do WRONG by struggling homeowners. Five whistleblowers from around the US have submitted testimony for a class action lawsuit in Massachusetts against Bank of America. The fraud & abuse levied on these homeowners by Bank of America is vast, and includes rejecting loan modifications en masse.

As noted by ProPublica:

Sometimes, homeowners were simply denied en masse in a procedure called a “blitz,” said William Wilson, Jr., who worked as an underwriter and manager from 2010 until 2012. As part of the modification applications, homeowners were required to send in documents with their financial information. About twice a month, Wilson said, the bank ordered that all files with documentation 60 or more days old simply be denied. “During a blitz, a single team would decline between 600 and 1,500 modification files at a time,” he said in the sworn declaration. To justify the denials, employees produced fictitious reasons, for instance saying the homeowner had not sent in the required documents, when in actuality, they had.

In fact, here’s a video of Bank of America rejecting requests for Loan Modifications en masse during one of these “blitzes”:

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Bank of America also destroyed important documents relating to a borrower’s loan, or loan modification request, in order to allow the bank to eventually move to foreclosure. As David Dayen reported for Salon:

Bank of America would simply throw out documents on a consistent basis.

Others say that bank employees falsified records in the computer system and removed documents from homeowner files to make it look like the borrower did not qualify for a permanent modification.

Here is Bank of America ensuring there is not a proper archives of customer files:

And if that weren’t bad enough, Bank of America got away with it, even as the banking regulator the OCC insisted on a $2 billion program for consultants to find problems with bank servicing. This $2 billion spent on consultants to review files did NOT turn up any of the evidence found in this BofA story. They did not find the whistleblowers. They did not find abuse. Maybe that’s because the OCC just Buries Wall Steet’s Bodies.

Here is Bank of America, easily avoiding the incompetent OCC by HIDING IN PLAIN SIGHT:

Nothing short of a perp walk is going to change the perverse incentives banks now have to cheat the American public out of everything we have. Will the DOJ act of these new allegations? Will SIGTARP claw back TARP payments to Bank of America for their failure to properly give out loan modifications under HAMP, which still has $29 billion in untapped money for homeowners?

Thus far, the Obama administration has pulled out all the stops for the banks, and thrown homeowners under a bus. Will these allegations change anything? Time will tell.