BofA channels Seinfeld’s ‘soup nazi’…No Loan Modification for you!

Bank of America Corp., 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.

“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.

The lender unsuccessfully tried to dismiss the complaint in 2011. U.S. District Judge Rya Zobel ruled that the case could proceed while dismissing some claims. Zobel is scheduled to consider the class-certification request at an Aug. 1 hearing.

Loan collectors who put at least 10 customers into foreclosure, including those who were in trial modifications, were given a $500 bonus, said Gordon, who worked at Bank of America for more than four years. Other rewards included gift cards for retailers including Target (TGT) and Bed, Bath and Beyond, she said.

Another former employee, Theresa Terrelonge, said loan officers were given restaurant gift cards and $25 cash awards for denying loan applications. The incentives moved workers to improperly reject applicants, Terrelonge said in a May 15 statement.

“I witnessed employees and managers change and falsify information in the systems of record, and remove documents from homeowners’ files to make the account appear ineligible for a loan modification,” said Terrelonge, a loan servicing representative. This allowed managers to meet quotas for closed cases, she said.

Bank of America instructed employees to delay applications and mislead customers “as part of a deliberate practice of stringing homeowners along,” lawyers said in a June 7 filing.

The law firm is in contact with more than 1,000 Bank of America customers who said they completed requirements for a trial and were denied permanent modifications, attorney Steve Berman of Hagens Berman Sobol Shapiro LLP said in a court filing. Lawyers supported their claims with declarations from the seven employees, many of whom said they had access to the bank’s software, which allowed them to understand the process.

“I personally reviewed hundreds of files in which the computer systems showed that the homeowner had fulfilled a trial-period plan” before being denied, said William Wilson, a loan manager who left the firm in August. “On many occasions, homeowners who did not receive the permanent modification that they were entitled to ultimately lost their homes.”

The bank offered some applicants who should’ve gotten HAMP modifications a more-expensive private loan that charged as much as 5 percent interest, compared with 2 percent under the U.S. program, said Wilson, a case-management leader overseeing 13 others.

The bank held a twice-monthly “blitz” in which thousands of cases were improperly denied, Wilson said. Employees would certify to the U.S. Treasury Department false reasons for rejections, he said.

And the story goes on…and, from what I hear in the field, I can’t believe that this is the only bank doing the same or similar things.

If you, or someone you know has gone through a situation like this…first thing is to contact a good foreclosure attorney. After that, it may be prudent to give me a call to discuss disposing of your home via a short sale before the bank can foreclose on you.

Reach me directly at 561.354.6011 or email

Thanks for reading…Steve Jackson

 

 

 

Read the complete Original article on Bloomberg