MSNBC’s Chris Hayes, “We Were Told to Lie” Say the Bank of America Employees

We have sued BoA over this same type of modification fraud.  I can’t tell you how many people have walked into my office with stories of Kafka-esque behavior by BoA relating to their Trial Payment Plan, or their modification review.  I’ve had schoolteachers clutching binders full of meticulously documented efforts to simply be reviewed for a modification.  I’ve had retirees who’ve had 26 different “single points of contact” from BoA.  I’ve talked to ex-BoA employees who can detail how BoA fudged its mod numbers, or tricked people into force-placed insurance by the BoA owned Balboa (now QBE).  So I’m not surprised by these allegations.  Not at all.  I’m just glad to see awareness raised.  Maybe one of the Arizona district court judges or state court judges will catch the news.  Maybe we’ll even get a response from AZ AG Horne that doesn’t sound like he is an apologist for the banks, rather than the state’s top lawyer charged with enforcing AZ law.

Chris Hayes did a show on the Bank of America revelations, with a panel including Eric Schneiderman, NY Attorney General.  Tom Horne might take a few notes from Schneiderman on at least appearing to care, and not just excuse all servicer misbehavior as “shortcuts” or paperwork problems.  No, this is called active fraud.

In an absolute bombshell filing in federal court, sworn affidavits describe an intentional strategy on the part of Bank of America to systematically lie to struggling homeowners right up to the point of foreclosure. Chris Hayes details the revelations with the All In panel

Urban—One of Bank of America’s Agents of Mod Fraud—Speaks Out

Bert Sheeks, an employee of Urban Settlement Services, did contract work for Bank of America, including HAMP modifications.  One of his tasks was to confirm whether the documents a borrower claimed to have sent appeared on Bank of America’s “I-Portal” system.  In his Declaration, filed in the In re HAMP MDL (Dkt. 210-7), he said:

Urban employees were instructed to close active borrower files based on limited criteria such as by simply seeing a copy of a drafted decline letter or a Missing Items Letter (“MIL”) on either I-Portal or SIEBEL (another Bank of America information management database).  ”Closing” a file meant closing the electronic SEIBEL file record.  Once a borrower’s SEIBEL file record was closed, that loan modification application or workout option was deemed finalized and retired.

So they would just look for a “draft” decline letter, would not verify its accuracy or that it wasn’t even sent to the borrower, and use that as an excuse to actually decline the modification.

We were instructed to close the SEIBEL file based on the existence of the draft letter, whether or not the borrower had actually sent in the required documents – even in cases where we knew the borrower, had, in fact, responded with complete documents.

The Urban department at which I worked was daily given a grid consisting of hundreds or even thousands of files with instructions to close the files.  Our job was to find any pretext in the file to justify closing-whether or not justified.

The written notices that borrowers were missing documents and requests that they submit additional documents were often suspect, and likely sent without proper due diligence as to whether the documents were indeed missing.

I recall several instances in which I personally viewed financial documents from a particular borrower on Bank of America’s document system and then personally updated the references on the system, only to see later notation that the same documents were re-requested from the same borrower and electronic file as missing [sic].

Bank of America Lied

Bank of America Lied to Homeowners and Rewarded Foreclosures, Former Employees Say

by Paul Kiel ProPublica, June 14, 2013, 5:44 p.m.

Bank of America employees regularly lied to homeowners seeking loan modifications, denied their applications for made-up reasons, and were rewarded for sending homeowners to foreclosure, according to sworn statements by former bank employees.

The employee statements were filed late last week in federal court in Boston as part of a multi-state class action suit brought on behalf of homeowners who sought to avoid foreclosure through the government’s Home Affordable Modification Program (HAMP) but say they had their cases botched by Bank of America.

In a statement, a Bank of America spokesman said that each of the former employees’ statements is “rife with factual inaccuracies” and that the bank will respond more fully in court next month. He said that Bank of America had modified more loans than any other bank and continues to “demonstrate our commitment to assisting customers who are at risk of foreclosure.”

Six of the former employees worked for the bank, while one worked for a contractor. They range from former managers to front-line employees, and all dealt with homeowners seeking to avoid foreclosure through the government’s program.

When the Obama administration launched HAMP in 2009, Bank of America was by far the largest mortgage servicer in the program. It had twice as many loans eligible as the next largest bank. The former employees say that, in response to this crush of struggling homeowners, the bank often misled them and denied applications for bogus reasons.

Sometimes, homeowners were simply denied en masse in a procedure called a “blitz,” said William Wilson, Jr., who worked as an underwriter and manager from 2010 until 2012. As part of the modification applications, homeowners were required to send in documents with their financial information. About twice a month, Wilson said, the bank ordered that all files with documentation 60 or more days old simply be denied. “During a blitz, a single team would decline between 600 and 1,500 modification files at a time,” he said in the sworn declaration. To justify the denials, employees produced fictitious reasons, for instance saying the homeowner had not sent in the required documents, when in actuality, they had.

Such mass denials may have occurred at other mortgage servicers. Chris Wyatt, a former employee of Goldman Sachs subsidiary Litton Loan Servicing, told ProPublica in 2012 that the company periodically conducted “denial sweeps” to reduce the backlog of homeowners. A spokesman for Goldman Sachs said at the time that the company disagreed with Wyatt’s account but offered no specifics.

Five of the former Bank of America employees stated that they were encouraged to mislead customers. “We were told to lie to customers and claim that Bank of America had not received documents it had requested,” said Simone Gordon, who worked at the bank from 2007 until early 2012 as a senior collector. “We were told that admitting that the Bank received documents 2018would open a can of worms,’” she said, since the bank was required to underwrite applications within 30 days of receiving documents and didn’t have adequate staff. Wilson said each underwriter commonly had 400 outstanding applications awaiting review.

Anxious homeowners calling in for an update on their application were frequently told that their applications were “under review” when, in fact, nothing had been done in months, or the application had already been denied, four former employees said.

Employees were rewarded for denying applications and referring customers to foreclosure, according to the statements. Gordon said collectors “who placed ten or more accounts into foreclosure in a given month received a $500 bonus.” Other rewards included gift cards to retail stores or restaurants, said Gordon and Theresa Terrelonge, who worked as a collector from 2009 until 2010.

This is certainly not the first time the bank has faced such allegations. In 2010, Arizona and Nevada sued Bank of America for mishandling modification applications. Last year, Bank of America settled a lawsuit brought by a former employee of a bank contractor who accused the bank of mishandling HAMP applications.

The bank has also settled two major actions by the federal government related to its foreclosure practices. In early 2012, 49 state attorneys general and the federal government crafted a settlement that, among other things, provided cash payments to Bank of America borrowers who had lost their home to foreclosure. Authorities recently began mailing out those checks of about $1,480 for each homeowner. Earlier this year, federal bank regulators arrived at a settlement that also resulted in payments to affected borrowers, though most received $500 or less.

The law suit with the explosive new declarations from former employees is a consolidation of 29 separate suits against the bank from across the country and is seeking class action certification. It covers homeowners who received a trial modification, made all of their required payments, but who did not get a timely answer from the bank on whether they’d receive a permanent modification. Under HAMP, the trial period was supposed to last three months, but frequently dragged on for much longer, particularly during the height of the foreclosure crisis in 2009 and 2010.

ProPublica began detailing the failures of HAMP from the start of the program in 2009. HAMP turned out to be a perfect storm created by banks that refused to adequately fund their mortgage servicing operations and lax government oversight.

Bank of America was far slower to modify loans than other servicers, as other analyses we’ve cited have shown. A study last year found that about 800,000 homeowners would have qualified for HAMP if Bank of America and the other largest servicers had done an adequate job of handling homeowner applications.

 

Arizona’s ABC 15 Investigative Series on Illegal Foreclosures in Arizona

ABC Channel 15 Arizona’s  series of reports about illegal foreclosures in Arizona.

1st story aired on Tuesday, June 12th:

http://www.abc15.com/dpp/news/local_news/investigations/arizona-victims-of-illegal-foreclosures-still-waiting-for-compensation

 

2nd and 3rd Stories that aired Thursday, June 14, 2013—this link is to a page that has TWO stories on it—make sure you watch them both!

http://www.abc15.com/dpp/news/local_news/investigations/Critics-Attorney-General-Tom-Hornes-plan-to-help-illegal-foreclosure-victims-too-little-too-late

 

4th story on Illegal Foreclosures is coming up in the next few days.

Bank of America’s Mod Fraud

More stomach churning admissions from the Bank of America camp…  You just know these employees are telling the truth, and you also know that BoA will try to discredit each and every one of them, “they’re disgruntled,” “they’re liars,” etc.  Takes one to know one, BoA.

Bank of America’s practice is to string homeowners along with no apparent intention of providing the permanent loan modifications it promises.  The processes Bank of America uses, and the instructions it gives its employees, appear to be designed to avoid modifying mortgage loans.

My co-workers and I were instructed to tell homeowners that modification documents were not received on time or not received at all when, in fact, all documents were received on time.  We were also instructed to tell homeowners that documents were sent on a particular date, when they had not been sent at all.

During my time at Bank of America, I saw well over a hundred cases in which a Bank of America “analyst” cancelled loan modifications and stated non payment as reason for the cancellation when it was apparent from the computer system that the homeowner had actually made all the required payments.

During my time at Bank of America, I saw records regarding hundreds of homeowners that Bank of America treated dishonestly.  These homeowners were eligible for loan modifications under HAMP, sent back all of the required documents and made all their required payments under a trial plan.  Bank of America nevertheless damaged their credit ratings by reporting them delinquent, tacked on additional charges to their loans, increased the amounts it considered as being owed, and often referred these homeowners to foreclosure.

During my time at Bank of America I saw records regarding hundreds of homeowners in Trial Plans but cannot recall any homeowners who had a trial plan properly converted to a permanent plan following three or four successful payments.  Many of the records I saw showed homeowners who made more than six or seven timely payments under Trial Plans, but had not received a permanent modification and were treated as being in default.

(Decl. of Erika Brown, (Doc. 210-6)).

More From the Bank of America Collection Machine; Putting Loan Sharks to Shame

I have been posting excerpts from declarations from the In re HAMP case.  To be clear, the plaintiffs’ lawyer, Steve W. Berman, of Hagens Berman Sobol Shapiro LLP is the attorney who should be credited with gathering this evidence, and filing it in the MDL.  Kudos to him.

It should also be noted that Berman also has filed a series of exhibits under seal, because Bank of America has claimed that these documents are confidential and subject to an existing protective order.  That issue will be determined by the judge.  This includes deposition excerpts of several Bank of America employees, and from the corporate representative deposition of Roger Parkinson.  It also includes internal emails between Bank of America employees.

Here are excerpts from the fourth affidavit from an ex-Bank of America call center employee.  These affidavits were filed by the plaintiffs’ attorney last Friday, in the large multi-district litigation entitled In re HAMP, 1:10-md-02193-RWZ (Doc. 210-5).  This declarant worked as a temporary “Home Retention Specialist” for Bank of America’s Texas call center:

Although I was called a “Home Retention Specialist,” my job was to collect as much money as possible from homeowners.

The autodialer made many thousands of calls an hour.  My understanding is that it was loaded with telephone numbers of borrowers who Bank of America considered delinquent.

Although as a temporary employee, I did not qualify for bonus compensation, our team received bonuses based on the number of calls made and “talk time.”

I was told the average call time I was supposed to meet was just seven minutes.

Many of the borrowers I spoke to claimed they were not delinquent because they had either temporary or permanent mortgage modification agreements with Bank of America.

For many of the calls I handled, I could confirm in Bank of America’s system that the borrower contacted was in a temporary or permanent modification status in Bank of America account records and that the borrower was current on payments under that agreement.

Approximately 4 in 10 of the borrowers I spoke with had been set up on temporary modifications and were current on their modification payments but had not received a permanent modification.  The borrowers, with a few exceptions, had made more than three monthly payments and had returned all of the requested supporting documents, but had not received permanent modifications.

She goes on to say that 2 of 10 borrowers were current on actual permanent modifications but were still being auto-dialed and harassed by the collection machine at Bank of America.  She says she would update the customer accounts to show that they were permanently modified and current although she was not supposed to.

I saw instances where Bank of America sent borrowers who were current on their permanent loan modifications foreclosure notices.  In some cases, where Bank of America did not update its system to implement the terms of a permanent modification, Bank of America foreclosed on homes of borrowers who were not delinquent on their permanent loan modification payments.

She details that she heard “again and again” from borrowers who had sent in documentation numerous times, and who were still being asked for the same information.