Bank of America Paid Bonuses to Foreclose on homes

Bank of America loan modification SCAM

Bank of America Paid Bonuses to employees to Foreclose on homes

Bank of America

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 in a Massachusetts lawsuit.

Bank of America Paid Bonuses to Foreclose on homes

Bank of America loan modification is a SCAM!

Bank of America REFUSED to work with me. I was jobless and we had a baby on the way. I needed 2 more months before starting another job. I begged them to take half payment in good faith for the next 2 months so we don’t get in trouble. I was 10 years on time every month with mortgage payments and just needed a little help. Bank of America refused. They would not discuss it. It was at that time, I knew what I was up against and how they really are.

“We were told to lie to Bank of America 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.

Bank of America employees 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 wants to foreclose on homes.

Bank of America denied the allegations in the affidavits, which were filed in a Massachusetts lawsuit on behalf of dozens of BofA borrowers in 26 states.

Report Bank of America to the FDIC. THEY HATE THIS!

More Bank of America LIES

“We continue to demonstrate our commitment to assisting customers who are at risk of foreclosure and, at best, these attorneys are painting a false picture of the bank’s practices and the dedication of our employees,” a spokesman said in a statement. “While we will address the declarations in more depth when we file our opposition to plaintiffs’ motion next month, suffice it is to say that each of the declarations is rife with factual inaccuracies.”

Since the housing crisis unfolded in 2007, Bank of America and other large mortgage servicers have maintained that widespread delays in processing loan modifications largely resulted from an overwhelming and unprecedented wave of troubled loans.

Regulators have repeatedly cited Bank of America for mistreating borrowers trying to modify their mortgages. In April 2012, five big banks—including Bank of America—settled a sweeping complaint with 49 states and several federal regulators about their foreclosure and loan modification practices. The banks agreed to provide $26 billion in relief and adhere to a sweeping series of new rules when modifying loans.

NONE OF THESE BANKS PROVIDED MORTGAGE RELIEF. The banks took the 26 billion from the government bailout money for themselves. This money was intended to help thousands of homeowners with their mortgages.

Bank of America leads in mortgage home loan modification scams

Later this week, a monitor assigned to track Bank of America’s practices will issue a report that’s expected to cite ongoing violations of home loan modification rules.

In their sworn testimony, former Bank of America employees detail a series of specific company policies designed to provide as little foreclosure relief as possible

“Based on what I observed, Bank of America was trying to prevent as many homeowners as possible from obtaining permanent HAMP loan modifications while leading the public and the government to believe that it was making efforts to comply with HAMP,” said Theresa Terrelonge, a Bank of America collector until June 2010.

“It was well known among managers and many Bank of America employees that the goal was to extend as few HAMP loan modifications to homeowners as possible”

The reason was fairly simple, according to William Wilson Jr., who worked as a manager in the company’s Charlotte, N.C., headquarters, where he supervised 13 mortgage representatives working on with customers seeking HAMP loan modifications.

After stonewalling qualified borrowers seeking an affordable HAMP loan, Bank of America representatives could upsell Bank of America customers to a more costly “in-house” loan modification, with rates 3 points higher than the 2 percent rate available under HAMP guidelines, Wilson testified.

“The unfortunate truth is that many and possibly most of these people were entitled to a HAMP loan modification, but had little choice but to accept a more expensive and less favorable in-house modification,” he said.

Courtney Scott was among the Bank of America customers who experienced repeated delays and denials for a government-sponsored modification of the mortgage on her suburban Atlanta home.

The retired nurse and grandmother grew increasingly frustrated after bank representatives repeatedly requested she fill out paperwork covering the same information.

“I got the HAMP loan modification denial from Bank of America in January, 2010 and then in June they came back with an in-house offer saying ‘Congratulations, you’ve been approved for a modification,'” said Scott. “But it only lowered my payments by about $7 and some cents.”

Scott turned down the offer and the bank moved to foreclose,an action she is contesting with the help of an attorney.

Scott’s frustration in complying with the banks request was designed to motivate her to agree to the in-house modification according to the former Bank of America workers.

In his affidavit, Wilson said most of the information the bank repeatedly requested from homeowners was already available in multiple document review systems.

Some completed Bank of America loan modification applications were denied one at a time, while other borrowers were rejected en masse in a process known as “the blitz,” Wilson said.

“Approximately twice a month, Bank of America would order that case managers and underwriters ‘clean out’ the backlog of HAMP Bank of America home loan applications by denying any file in which the financial documents were more than 60 days old,” he said.

“The homeowner had provided all required financial loan modification documents, which were shredded by Bank of America.”

The procedures described in the affidavits will come as no surprise to attorneys working with borrowers trying to save their homes from foreclosures, according to Max Gardner, a North Carolina bankruptcy attorney who trains other lawyers on legal strategies to thwart foreclosure

“This policy—of dragging out the Bank of America home loan modification process as long as we possibly can and tell (the homeowner) you didn’t qualify or the Bank of America loan modification failed or we didn’t get this document or you didn’t sign it in the right place or we lost this form—is consistent with what we’ve seen,” he said.

Beyond the policy of denying affordable loan applications, Bank of America also encouraged its employees to move loans to foreclosure—even when the process could have been prevented, according to said Erika Brown, a former bank customer service representative.

“These homeowners were eligible for loan modifications under HAMP, sent back all the required documents and made all their required payments under a trial plan,” she said. “Bank of America nevertheless damaged their credit ratings by reporting them delinquent, tacked on additional charges to their loans, increased the amounts it considered as being owed and often referred these homeowners to foreclosure.”

The motivation for mortgage servicing companies like Bank of America to move loans to foreclosure is driven by the often perverse economics of the modern mortgage servicing business, according to consumer advocates and attorneys defending against foreclosures.

When the tens of millions of loans written during the housing boom of the mid-2000s were sold off to investors, lenders like Bank of America took over the job of collecting checks, making property tax and insurance payments, assessing late fees and other clerical work.

When a borrower defaults on a loan and the bank forecloses, investors who own the loan typically bear the loss on the unpaid principal balance. But the foreclosure process generates a lucrative stream of fees for mortgage servicers like Bank of America—for everything from property inspections to legal work required to seize a home.

Those added fees provide mortgage servicers like Bank of America with a financial incentive to foreclose—and a disincentive to provide a more affordable loan, according to consumer advocates. The company shared those incentives—and disincentives—with its workers, based on foreclosure quotas spelled out in monthly meetings with managers, according to Gordon.

“A collector who placed 10 or more accounts into foreclosure in a given month received a $500 bonus,” she said. “Bank of America also gave employees gift cards to retail stores like Target or Bed Bath & Beyond as rewards for placing accounts into foreclosure. Bank of America collectors and other employees who did not meet their quotas by not placing a sufficient number of accounts into foreclosure each month were subject to termination. Several of my colleagues were terminated on that basis.”

Bank of America agreed to abide by HAMP program guidelines, which require it to modify loans for qualified buyers, when it accepted $25 billion in bailout funds from the government in 2008 following the housing collapse. In return for the financial lifeline, the bank agreed to help millions of struggling homeowners by rewriting mortgages with more affordable terms. As an added incentive, the government agreed to pay a cash bonus for every loan that was modified successfully.

But, according to the former employees, while the bank was lying to borrowers, it was also falsifying its performance when reporting to the government the number of loans that had been modified.

“Often this involved double counting loans that were in different stages of the modification process,” according to Steven Cupples, who supervised a team of Bank of America underwriters until June 2012. “It was well known among Bank of America employees that the numbers Bank of America was reporting to the government and to the public were simply not true.”

The case, which involves 29 separate complaints against Bank of America, was consolidated in Nov., 2011 inthe U.S. District Court for Massachusetts. Earlier this month, the lead attorneys in the case, Klein Kavanagh Costello in Boston and Hagens Berman in Seattle, asked District Judge Rya W. Zobel to certify the complaint as a class action involving other borrowers whose loans were serviced by Bank of America. The class would cover anyone who made trial payments under the HAMP program after April 13, 2009 and was denied a permanent modification.

If you are getting screwed over by Bank of America and in fear of losing your home, as I am, there are a few things you can do to protect yourself:

  1. File chapter 7 bankruptcy and include the house. Once you file chapter 7 bankruptcy, Bank of America cannot come after you for any fees or the balance of the home! NEVER reaffirm the bank loan after filing chapter 7 bankruptcy! Reaffirming the loan means you are promising to pay the bank if you decide to walk from the house under the protection of chapter 7 bankruptcy. If you file chapter 7 bankruptcy and want to still live in your home, you can, as long as you make your monthly mortgage payments. You can walk away free and clear at any time!
  2. Report Bank of America to the FDIC. THEY HATE THIS! They’re in enough trouble as it is and one report to the FDIC is mass leverage for you. If you want them to call you back fast, report Bank of America to the FDIC. I did, and they were on the phone trying to reach me within 2 days.
  3. Get a good attorney. They can fight the bank and keep you in your house for a year or two or longer. You pay a monthly fee to the attorney ($500 or less) for this service. During the two years, you save for a new place.

I’m not an attorney but have been through a lot of crap with Bank of America. They are screwing my family over, just like they did with countless other families.

Bank of America REFUSED to work with me. I was jobless and we had a baby on the way. I needed 2 more months before starting another job. I begged them to take half payment in good faith for the next 2 months so we don’t get in trouble. I was 10 years on time every month with mortgage payments and just needed a little help. Bank of America refused. They would not discuss it. It was at that time, I knew what I was up against and how they really are.

I am currently battling them, hoping to force an affordable loan modification. If they do not grant it, we will have to walk from the home. In the meantime, while we’re in the home, Bank of America will have to pay the taxes since they own the home.

I will report them to the FDIC again, the Better Business Bureau again, and will more than likely take this to the media..channel 5 news. Channel 5 loves these stories. There is also this blog and my YouTube channels. I want to inform as many people as I can.

Good luck to you all!

 

 

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