Bank of America Lied To Homeowners About Loan Modifications and Rewarded Employees Who Did Most Foreclosures, Says Lawsuit

J Thomas Black
Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization
Posted on Jun 15, 2013

For years, I've had hundreds of bankruptcy clients and prospective clients claim that they had sent all the required documents and made the required trial period plan payments to their mortgage lenders to obtain a loan modification under the federal Making Home Affordable or HAMP foreclosure prevention program. They just could not understand why their permanent loan modifications were being denied, often repeatedly.

Well, I guess the truth is coming out now. In a lawsuit in Florida U.S. District Court, former employees of Bank of America (BANA) paint a very ugly picture of how BANA handled, or rather mishandled, the HAMP loan modifications that were submitted to them by borrowers. Loan agents were assigned 400 loan modification files at a time, an impossible number. Periodically there were "blitzs" where they were told to deny large numbers of modifications, just because the documents were over 50 days old.

Employees stated that there were even contests where employees that put more than 10 files into foreclosure each month could get gift cards to Target and Bed Bath and Beyond or cash bonuses.

The lawsuit was first filed in 2010, and combines legal actions that were pending in several states. The plaintiffs are asking that the cases be turned into a class action.

 

 

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