Plaintiffs in the In re HAMP litigation in Massachusetts filed damning affidavits in the case last Friday. Some of the more jaw-dropping revelations were:
We were instructed to delay and then push homeowners to accept an internal refinance so that Bank of America would profit. Once an applicant was finally rejected after a long delay, the bank would offer them an in-house alternative. Bank of America would charge a higher interest rate, ranging up to 5%, as compared to the 2% if the loan had been modified under HAMP. The unfortunate truth is that many and possibly most of these people were entitled to a HAMP loan modification, but had little choice but to accept a more expensive and less favorable in-house modification. (para. 8).
Upon joining the newly formed Case Management Department, I began to experience what Bank of America termed a “blitz.” Approximately twice a month, Bank of America would order that case managers and underwriters “clean out” the backlog of HAMP applications by denying any file in which the financial documents were more than 60 days old. These included files in which the homeowner had provided all required financial documents and fully complied with the terms of a Trial Period Plan.
During a blitz, a single team would decline between 600 and 1,500 modification files at a time for no reason other than that the documents were more than 60 days old. Bank of America instructed its CRMs, underwriters and other employees to enter a reason that would justify declining the modification to the Treasury Department. Justifications commonly included claiming that the homeowner had failed to return requested documents or had failed to make payments. In reality, these justifications were untrue. 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.
On many occasions, homeowners who did not receive the permanent modification that they were entitled to, ultimately lost their homes to foreclosure.
The delay and rejection programs within Bank of America were methodically carried out. . . .
Employees who challenged or questioned the ethics of Bank of America’s practice of declining modifications for false and fraudulent reasons were often fired.
I told my supervisors that these practices were ridiculous and immoral. People who had done everything that Bank of America had asked of them were losing their homes to foreclosure because BoA had chosen not to hire enough underwriters and was reducing its backlog with unethical and even fraudulent methods.
Affidavit of William E. Wilson, Jr. (former underwriter and Case Management Team Manager for Bank of America in Charlotte, NC) This is just one of the six affidavits filed. More to come…