Bank of America systematically worked to deny thousands of loan modifications with specific delay tactics that included lying to homeowners and repeatedly requesting documents employees knew were already in the system, according to statements added last week to a multi-district lawsuit filed in federal court.
The suit, which is seeking class-action status and includes a Boynton Beach homeowner, claims the lender purposefully hindered modifications requested by borrowers through the federal Home Affordable Modification Program.
According to former employees of the Charlotte, North Carolina-based bank, loan modification agents handled up to 400 cases at a time and eligible borrowers were pushed into foreclosure during periodic “blitzes” where any file with documents 50 days old or older was automatically denied.
“This included files in which the homeowner had provided all required financial documents and fully complied with terms of the trial period,” said William E. Wilson, a former Bank of America underwriter who worked for the company between June 2010 and August 2012. “The delay and rejection programs within Bank of America were methodically carried out.”
Wilson, whose statement was taken June 5 and filed with the court two days later along with affidavits from six other former employees, says he was fired by Bank of America after complaining the denials were unfair.
Bank of America issued a statement Thursday saying the statements are “rife with facutal inaccuracies” that will be addressed in opposition documents filed next month.
“We continue to demonstrate our commitment to assisting customers who are at risk of foreclosure and, at best, these attorneys are painting a false picture of the bank’s practices and the dedication of our employees,” the statement said.
Simone Gordon, who worked for Bank of America between July 2007 and February 2012, said she was told to lie about documents not being received so they would get stale and the process would have to restart.
Employees who placed 10 or more accounts into foreclosure in a month could get gift cards to Target and Bed, Bath and Beyond or $500 bonuses, Gordon said.
“We were regularly drilled that it was our job to maximize fees for the bank by extending HAMP modifications by any means we could, including lying to customers,” Gordon said.
The claims validate years of homeowner complaints about having to fax the same documents to lenders over and over again only to be denied with no reason given, foreclosure defense attorneys say.
The lawsuit, which combined legal actions from several states and is being handled in a federal court in Massachusetts, was first filed in 2010.
Florida Attorney General Pam Bondi recently wrote letters to both Wells Fargo and Bank of America with concerns that the lenders are violating loan servicing rules included in the National Mortgage Settlement.
“The affidavits and the allegations in Bondi’s letter are just more evidence of what consumers have faced all along _ blatant abuse by the banks,” said St. Petersburg foreclosure defense attorney Matt Weidner. “It’s time for Bondi to step in and enforce the terms of the agreement she was so instrumental in negotiating.”
In response to Bondi’s letter, Bank of America said it has provided more mortgage relief to homeowners under the National Mortgage Settlement than all other lenders combined and works “quickly to address any problems brought to our attention.” Through March, Bank of America provided more than $27.8 billion in mortgage relief nationwide, including nearly $5 billion in Florida.
Boynton Beach homeowner Shari Goldman said in her lawsuit that she successfully completed a trial loan modification that reduced her monthly payment by $390. She continued to pay the same amount while repeatedly calling to find out if she would get a permanent modification.
Six months after being approved for the trial plan, she was denied a permanent modification, told she owed $3,158 in back payments, and was threatened with foreclosure. She paid the $3,158, according to the lawsuit, but was wrongly told she couldn’t appeal the modification denial.
Goldman later did appeal, but was denied again. Palm Beach County court and property records show no foreclosure was filed against Goldman and that she is still the owner of the home.
The federal Home Affordable Modification Program was announced in 2009 to help homeowners by giving incentives to banks to lower mortgage payments. Former Bank of America employees said the lender blocked eligible homeowners from getting modifications with purposeful delay tactics.