Congresswoman Calls for Federal Inquiry into BofA Foreclosure Practices
Congresswoman Maxine Waters (D-CA), in response to recent reports that Bank of America had misled homeowners eligible for the Home Affordable Modification Program, formally requested a federal investigation into the matter.
Our Miami foreclosure defense attorneys understand that Waters, who is a ranking member of the House of Representatives Financial Services Committee, sent a letter the Special Inspector General for the Troubled Asset Relief Program (TARP). In that letter, Waters called for an investigation into the practices of Bank of America, as well as any other mortgage servicer, who reportedly benefits from misleading borrowers who were eligible for HAMP.
Numerous media outlets have cited court documents obtained during the course of civil litigation, in which former Bank of America employees testified under oath that BofA – which is the second-largest lender in the U.S. – had doubled down on its efforts to get employees to maximize profits for the bank by systematically creating and extending delays in the home loan modification program so that mortgages would instead be funneled into foreclosure.
Waters cited a substantial amount of anecdotal evidence and academic studies showing that foreclosure is the most profitable option for the bank. While it’s understandable that the banks would want to look out for its own bottom line, the problem is that participation in the program was made mandatory via a federal settlement that compelled banks to cooperate due to their part in the initiation of the housing market collapse, as well as the subsequent foreclosure abuses.
In addition to the letter sent to the inspector general’s office, Waters also sent a letter to the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve (also known as the Fed), asking them to determine whether the allegations made against the bank, if true, might at all interfere with the Independent Foreclosure Review settlement that the company reached earlier this year. You may recall those so-called “independent” reviews, established to determine the extent to which individual homeowners had suffered foreclosure abuses, were abruptly halted in favor of a settlement. That was after it was learned that the reviews weren’t nearly as independent as the banks were holding them out to be, and outcomes were unfairly and disproportionately being decided in the banks’ favor by reviewers who were being paid billions by these same lending institutions.
The civil case that sparked this most recent call for action was a civil lawsuit filed in federal court in Massachusetts, in which ex-employees stated that the lender had improperly disqualified applicants from the HAMP. The plaintiff homeowners say they were denied loan modifications, even when they had kept up on payments tied to the program. The bank routinely told customers it had lost paperwork, when in reality it hadn’t. Doing so, the employees said, was intended to cause significant delays and push the cases into foreclosure. Employees who were successful in getting their cases moved to a foreclosure track were rewarded with gift cards and cash bonuses.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call 305-358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.