Econintersect: On 17 June 2013 GEI News published an article with the headline: “Blockbuster: Alleged Bank of America Paid Bonuses for Foreclosures“. The allegations by presumed whistleblowers were contained in sworn depositions for a suit filed by borrowers against the nation’s second largest mortgage lender last month. The suit claimed damages because the bank was alleged to have had processes that encouraged employees to pursue foreclosures rather than loan modifications. Documents filed by the bank yesterday (12 July 2013) claim that the allegations by former employees were made by people who had “limited roles” related to their sworn statements.
Bank of America charges that some of the former workers had ulterior motives to “manufacture false accusations“. The bank said:
“… At least six of the seven were fired for inappropriate behavior, including threatening violence against a coworker, sending inappropriate text messages to a member of his team and bullying his associates.”
The bank said that the workers “contrived allegations” in their statements that described $500 bonuses for bank workers who placed 10 or more accounts into foreclosure in a month. The bank also gave Target and Bed Bath & Beyond gift cards for sending homeowners into foreclosure, according to the statements.
From Bloomberg:
The former employees’ “wild misrepresentations about their roles lead to impossible claims about what they did and saw,” Bank of America said. They
“could not have witnessed what they claim to have witnessed because they were not in a position to do so and would not have witnessed such things in any event because Bank of America’s actual practices were diametrically opposite.”
There will be an assessment of the claims and counter claims in addition to the court proceedings of the class action suit. Last month Joseph Smith, overseer of the $25 billion settlement reached with 49 states and five major banks, including Bank of America, called the allegations in the statements serious. He has announced that he would be examining the Massachusetts suit for any evidence that the bank violated the settlement.
ProPublica has reported on their investigations of the Bank of America situation and similar events at other banks. From ProPublica:
The law suit with the explosive new declarations from former employees is a consolidation of 29 separate suits against the bank from across the country and is seeking class action certification. It covers homeowners who received a trial modification, made all of their required payments, but who did not get a timely answer from the bank on whether they’d receive a permanent modification. Under HAMP, the trial period was supposed to last three months, but frequently dragged on for much longer, particularly during the height of the foreclosure crisis in 2009 and 2010.
ProPublica began detailing the failures of HAMP from the start of the program in 2009. HAMP turned out to be a perfect storm created by banks that refused to adequately fund their mortgage servicing operations and lax government oversight.
Sources:
- Blockbuster: Alleged Bank of America Paid Bonuses for Foreclosures (GEI News, 17 June 2013)
- BofA Says Ex-Woeker Made Impossible Loan-Program Claims (Hugh Son and David McLaughlin, Bloomberg, 12 July 2013)
- Bank of America: Ex-workers made ‘wild misrepresentations’ in HAMP suit (Deon Roberts, Charlotte Observer, 12 July 2013)
- Bank of America Lied to Homeowners and Rewarded Foreclosures, Former Employees Say (Paul Keil, ProPublica, 14 June 2013)
