Bank of America Accused of Giving Bonuses to Employees Who Cheated Homeowners

foreclosure signThe latest post-housing crash/Great Recession bombshell: Former Bank of America employees have released sworn statements noting that they regularly lied to homeowners seeking loan modifications through the Home Affordable Modification Program that President Obama launched in 2009. They say they denied their applications for made-up reasons and were rewarded with bonuses or gift cards to retail stores or restaurants for sending homeowners to foreclosure.

And wait, as if that wasn't enough, there are even MORE stomach-churning details ...

  1. Employees say that every so often the bank would conduct a "blitz," rejecting 600 to 1,500 modification applications at once. Employees were told to make up fake reasons for the rejections.
  2. One employee wrote, "We were told to lie to customers and claim that Bank of America had not received documents it had requested. We were told that admitting that the Bank received the documents 'would open a can of worms.'"
  3. Underwriters would often have hundreds of outstanding applications awaiting review. Homeowners would be told their applications were "under review" when nothing had been done on them -- or even if they'd already been rejected.
  4. Another direct quote: "Employees who challenged or questioned the ethics of ... declining modifications for false and fraudulent reasons were often fired. There was an extremely high level of turnover."
  5. This isn't the first time allegations like these have come up. In 2010, Arizona and Nevada sued Bank of America for mishandling modification applications. And just last year, Bank of America settled a lawsuit brought by a former employee of a bank contractor who accused the bank of mishandling HAMP applications.

At the same time, BofA claims the lawsuit, which is seeking class-action status, is "rife with factual inaccuracies," which it says it will address more fully in court. Should be interesting to see what they have to say about all of this ... and if justice is served, considering these alleged practices may have affected (and still be affecting!) so many innocent homeowners who, if any of this is true, should be INFURIATED.

What do you make of this news?


Image via JeffreyTurner/Flickr

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