Bank of America reward employees for sending borrowers into foreclosure.

Bank of America Corp. (BAC), the second-biggest U.S. lender, rewarded staff with cash bonuses and gift cards for meeting quotas tied to sending distressed homeowners into foreclosure, former employees said in court documents.

Mortgage workers falsified records and were told to delay U.S. loan-assistance applications by requesting paperwork that the Charlotte, North Carolina-based bank had already received, according to statements from ex-employees filed last week in federal court in Boston. The lender improperly disqualified applicants to the Home Affordable Modification Program, or HAMP, according to a May 23 statement from Simone Gordon, a loss-mitigation specialist who left the company in 2012.

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.

“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,” Gordon said. 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,” she said.

Bank of America, which has spent more than $45 billion to settle claims tied to its 2008 takeover of Countrywide Financial Corp., is being sued by homeowners who didn’t receive permanent loan modifications after making payments under trial programs, according to court papers. Statements from seven former loan employees were included in a filing last week as part of plaintiffs’ attempt to gain class-action status. The lender has denied the allegations.

We have several videos on our web site.  Below are a few that might be of interest:
  • “Lender’s Foreclosure Rights in Arizona”
  • “Should I keep my home or let it go into foreclosure?”
  • “Meet Ms. Drain and Suggestions on How to Hire an Attorney”

MUSINGS BY DIANE: “So, am I surprised by this report? Absolutely not.  Not after the actions I saw and stories I heard while working for one of the largest lenders in Arizona.  Admittedly that was in the late 1980’s and early 90’s, but the demands on the bank employees are the same today as then.  Currently, friends who are lawyers for some of the large lenders tell me sickening stories about how the bank employees deal with defaulted loans and distressed borrowers.  Even though I understand the stress that bank employees are facing I cannot condone their actions.  They are causing actual harm to the innocent homeowner.  Shame on them, their bosses and the organizational structure that dictates outrageous behavior.”

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