Bank of America whistle-blower’s bombshell: “We were told to lie” (David Dayen, Salon)

[swag]

http://www.salon.com/2013/06/18/bank_of_america_whistleblowers_bombshell_we_were_told_to_lie/

Bank of America’s mortgage servicing unit systematically lied to homeowners, fraudulently denied loan modifications, and paid their staff bonuses for deliberately pushing people into foreclosure: Yes, these allegations were suspected by any homeowner who ever had to deal with the bank to try to get a loan modification – but now they come from six former employees and one contractor, whose sworn statements were added last week to a civil lawsuit filed in federal court in Massachusetts.

“Bank of America’s practice is to string homeowners along with no apparent intention of providing the permanent loan modifications it promises,” said Erika Brown, one of the former employees. The damning evidence would spur a series of criminal investigations of BofA executives, if we still had a rule of law in this country for Wall Street banks.

The government’s Home Affordable Modification Program (HAMP), which gave banks cash incentives to modify loans under certain standards, was supposed to streamline the process and help up to 4 million struggling homeowners (to date, active permanent modifications number about 870,000). In reality, Bank of America used it as a tool, say these former employees, to squeeze as much money as possible out of struggling borrowers before eventually foreclosing on them. Borrowers were supposed to make three trial payments before the loan modification became permanent; in actuality, many borrowers would make payments for a year or more, only to find themselves rejected for a permanent modification, and then owing the difference between the trial modification and their original payment. Former Treasury Secretary Timothy Geithner famously described HAMP as a means to “foam the runway” for the banks, spreading out foreclosures so banks could more readily absorb them.

These Bank of America employees offer the first glimpse into how they pulled it off. Employees, many of whom allege they were given no basic training on how to even use HAMP, were instructed to tell borrowers that documents were incomplete or missing when they were not, or that the file was “under review” when it hadn’t been accessed in months. Former loan-level representative Simone Gordon says flat-out in her affidavit that “we were told to lie to customers” about the receipt of documents and trial payments. She added that the bank would hold financial documents borrowers submitted for review for at least 30 days. “Once thirty days passed, Bank of America would consider many of these documents to be ‘stale’ and the homeowner would have to re-apply for a modification,” Gordon writes. Theresa Terrelonge, another ex-employee, said that the company would consistently tell homeowners to resubmit information, restarting the clock on the HAMP process.

Worse than this, Bank of America would simply throw out documents on a consistent basis. Former case management supervisor William Wilson alleged that, during bimonthly sessions called the “blitz,” case managers and underwriters would simply deny any file with financial documents that were more than 60 days old. “During a blitz, a single team would decline between 600 and 1,500 modification files at a time,” Wilson wrote. “I personally reviewed hundreds of files in which the computer systems showed that the homeowner had fulfilled a Trial Period Plan and was entitled to a permanent loan modification, but was nevertheless declined for a permanent modification during a blitz.” Employees were then instructed to make up a reason for the denial to submit to the Treasury Department, which monitored the program. Others say that bank employees falsified records in the computer system and removed documents from homeowner files to make it look like the borrower did not qualify for a permanent modification.

. . . more

http://www.salon.com/2013/06/18/bank_of_america_whistleblowers_bombshell_we_were_told_to_lie/

[enlightenment]

1. They should be shut down,

but it will never happen. They'll get some sort of drop-in-a-bucket fine that will hardly dent their profits and go right back to doing what works.

[Vinnie From Indy]

2. Bank of America executives named as

spearheading the fraud and lying to fed officials are:
John Berens, Patricia Feltch and Rebecca Mairone.

They deserve a bit of public recognition for their efforts. Berens has since moved to Chase bank.

This Mairone lady has quite the pedigree of white collar crime!

Rebecca Mairone, formerly a top official at Countrywide Financial, has been named in an amended complaint filed earlier this month by Preet Bharara, the U.S. Attorney for the Southern District of New York, against Countrywide and its parent Bank of America. The suit alleges that Mairone, as chief operating officer for Countrywide's Full Spectrum Lending division in 2007, set up a program dubbed the "High Speed Swim Lane," or "HSSL," or "Hustle," to speed up the origination of mortgage loans, including increasingly shady subprime loans. The government claims the alleged Hustle ultimately cost its sponsored entities Fannie Mae and Freddie Mac more than $1 billion in losses.

More at:http://www.huffingtonpost.com/2013/01/31/rebecca-mairone-hustle_n_2590525.html

[DetlefK]

3. I demanded it once, I demand it again:

Hold executives personally responsible for crimes committed by that corporate person.

[sigmasix]

4. where is all that righteous outrage from the Obama Derangement syndrome folks?

All that manufactured outrage about Obama's evil intentions and so-called criminal actions seems to be restricted to treasonous Teabaggers in disguise as American patriots. The Teabaggers love to hear about how the banks used American tax payer money to destroy the lives of so many middle class Americans. Where is all that righteous indignation when it comes to the banking industry friends of the Koche brothers stealing American tax payer money? These same people have been so busy whining about legal information gathering and blaming President Obama for the lies of the right wing media that they have no allegiance to truth or America- just to the broken record that is Obama Derangment Syndrome.
Just so we dont forget; banks can steal from American tax payers as long as the koche brothers are in control of the teabagger faction and all of that manufactured outrage. We can continue to count on the bigots and ODS sickos of the teabagger faction to supply America with conspiracy theories and anti-American lies about the president while they encourage banks to steal even more money from Americans.
Why do Teabaggers hate America so much that they want to give it to the criminally rich? Is it really that difficult for racists and homophobes to tolerate having a man of mixed heritage as president?

[FirstLight]

6. I'm no teabagger

but I think the POTUS is just as much to blame as any...if he'd cleaned house when he took office and come down hard on the banks, it may have stopped the leaching of the economy...but what do I know? I'm just a poor serf...

[FirstLight]

5. boy, doesn't this say it all?

The damning evidence would spur a series of criminal investigations of BofA executives, if we still had a rule of law in this country for Wall Street banks.

ya, the banks will never be held to the rule of law, because they PAY for everyone's campaigns...they all have their hands in each-other's pockets...and yes, I think our POTUS is afraid to condemn the banks because they would turn on him and crash the economy and he would be the one to take the blame... but then again, maybe he isn't pushing for prosecutions of these bastards because he's buddy-buddy with them

[Iliyah]

7. Where the fuck is Issa?

[SwankyXomb]

8. Benghazi, of course..

[blkmusclmachine]

9. Enjoy Guantanamo, courtesy of the 1%.

We're all Germans now

[Doctor_J]

10. So I guess it's OK to call these whistle-blowers

but snowden is a "leaker".

Fascistspeak cometh