A recent article in Bloomberg highlights the “foreclosure frenzy” that’s engulfing Bank of America. Five former Bank of America employees filed declarations in a federal court that “they were instructed to mislead customers on the verge of losing their homes and stall their applications for loan modifications.” In short, the former employees accused the big bank of telling them to lie to customers and to increase residential foreclosures.
Yet, Bank of America says it did everything it could to keep homeowners in their houses. According to Jumana Bauwens, a Bank of America spokesperson, “these allegations are absurd, patently false and contrary to Bank of America’s long-standing policy only to foreclose as a last resort.”
So, who’s telling the truth? Will Bank of America face mortgage fraud convictions or other legal repercussions? And will the outcome have an impact on the housing market recovery in Illinois?
Has Bank of America Lied Before?
The Bloomberg article suggests that there’s a history of deception at Bank of America when it comes to foreclosure practices. The U.S. Treasury Department’s Home Affordable Modification Program (HAMP) may have failed to provide relief to struggling homeowners due at least in part to corporate greed. After all, “major banks that service mortgage loans often can make more money from foreclosures than from loan modifications.” A story in the Wall Street Journal’s “Market Watch” recalls consumer complaints that have been filing in since 2009 with allegations that “the bank inexplicably lost their paperwork—and then their homes were foreclosed.”
And what about robo-signing allegations? Didn’t bank employees risk “committing perjury when they signed false affidavits”? Indeed, Bank of America has already been held accountable for some of these issues. The Wall Street Journal reminds us that Bank of America was part of last year’s $25 billion settlement that was supposed to make amends for “abusive foreclosure practices.”
Details of the Current Lawsuit
The recent allegations against Bank of America arose in a federal court in Boston. Homeowners have filed a lawsuit against the bank, arguing that “they were improperly denied permanent loan modifications.” While Bank of America claims that these homeowners “failed to return requested documents” or “failed to make payments,” former employees’ testimonies tell a different story.
The Wall Street Journal points out that the former employees’ statements have been submitted under penalty of perjury, which emphasizes the seriousness and assumed veracity of their accounts. And they don’t paint a pretty picture for Bank of America.
Recorda Simon, who worked at the Bank of America call center in Fort Worth, Texas in 2010 stated, “Although I was called a ‘Home Retention Specialist,’ my job was to collect as much money as possible from homeowners.”
Even worse, another employee who worked at the bank from July 2007 to February 2012 testified that she and her co-workers had been instructed to lie to customers. “We were told to lie to customers and claim that Bank of America had no received documents it had requested, and that it had not received trial payments when in fact it had,” reported Simone Gordon.
In fact, Gordon went on to explain that collectors who accrued 10 foreclosures or more in a given month were “rewarded” with a $500 bonus. Other employees noted that Bank of America gave out retail store gift cards when they placed accounts into foreclosure. Theresa Terrelonge, who worked for the bank from 2009-2010 as a loan-servicing representative echoed these statements, recalling how she and other employees “were awarded incentives such as $25 in cash, or a restaurant gift card” when they declined applications for loan modifications.
Homeowners are still in trouble across the country, and it looks like Bank of America may have had a hand in it. If you’re currently facing foreclosure or have questions about the recent claims against Bank of America, an experienced foreclosure defense lawyer can discuss your case with you today.
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