Since 2010, a lawsuit has been pending against Bank of America, alleging that the bank intentionally violated HAMP contracts with borrowers. These are the contracts from the federal loan modification program, giving borrowers a chance to change to more favorable loan terms if they meet certain criteria. At Howard Law, P.C., our Moreno Valley foreclosure defense lawyers have believed for many years that lenders misused and defied these programs, using them to string borrowers along and push them into foreclosure without providing any help. Now, documents filed in the Bank of America lawsuit offer hard evidence of this. In damning documents filed June 7, multiple former Bank of America employees testified under oath that they were ordered, and even paid, to deny loan modifications and drive borrowers into foreclosure because this was more profitable for the bank.
In re Bank of America HAMP Contract Litigation is multi-district litigation, which means it consolidates multiple lawsuits alleging the same behavior by the same defendant. All of the plaintiffs allege that Bank of America actively thwarted their efforts to get a loan modification through HAMP. In support of a motion for class certification, they filed sworn statements from seven former employees who alleged that they routinely lied to borrowers; falsified their internal records; and were paid cash bonuses or with gift cards for meeting quotas for denying applications or moving borrowers into foreclosure. The bank ordered employees (who the lawsuit alleges were intentionally overworked) to hold documents at least 30 days before reviewing them, allowing the bank to claim they were "stale" and start the process over again. Twice a month, the bank allegedly held a "blitz," deleting documents older than 60 days for no other reason.
The statement by William Wilson Jr. is instructive. Wilson testified under oath that he had a huge backlog of HAMP applications that was many times the normal workload. Later, as a supervisor in a department dedicated to managing HAMP applications, he alleged that the bank sat on time-sensitive HAMP applications for months without review. He said he was instructed to claim documents were missing or incomplete when they were not, or say the file was under review when the bank had no plans to review it. After a long delay, he said, the bank would offer a non-HAMP loan modification with a much higher interest rate, allowing it to profit. In other cases, he said, people denied HAMP modifications they were entitled to ultimately wound up in foreclosure. The employees were then instructed to lie to the Treasury Department about why the modifications were denied. Employees were fired routinely for questioning the ethics of this practice, he said, and Wilson himself was eventually fired after bringing up his concerns several times.
Wilson is just one of seven people, not all from the same office, making similar allegations. Bank of America denies that any of it is true, but Vincent Howard and our Anaheim foreclosure defense attorneys believe it. The statements fit with what we saw from the outside during the housing downturn. And perhaps most importantly, the economic logic is right. Bank of America, like all corporations, exists to make money, and HAMP was not as profitable as foreclosure or an in-house loan workout. For that reason, perhaps it was inevitable that the program wouldn't work. Now, plaintiffs like the ones in these cases are left to sort out whether they are entitled to any relief, since Congress didn't include a private right of action in the law authorizing HAMP--or give it any other teeth. Vincent Howard and our Chino foreclosure defense lawyers believe no enforcement mechanism is an invitation to this kind of abuse.
If you believe you were pushed into foreclosure by any of the unethical practices described in this lawsuit, you should call Vincent Howard and the team at Howard Law today. You can send us a message through our website or call 1-800-872-5925.