As everyone knows, Las Vegas was uniquely hit by the real estate bubble several years ago, and large percentages of homeowners are underwater in their mortgages. The federal government came to the rescue with various relief programs, one of which was the Home Affordable Modification Program (HAMP). HAMP was designed to encourage banks to modify mortgages with struggling homeowners by giving the banks cash incentives. Now, it appears that a group of Bank of America (BoA) employees are blowing the whistle on the bank’s practices by submitting sworn affidavits in a civil suit against BoA filed in Massachusetts federal court. The employees allege that BoA abused HAMP modifications and sent homeowners into foreclosure. Here’s what BoA did according to Salon.com:
(1) HAMP modifications included a three-month trial period, but BoA illegally stretched that period to a year. Then it denied homeowners the modification and demanded they pay the accrued interest between the amount paid under the modified terms and the original terms.
(2) BoA didn’t train its employees as to how HAMP worked, and it instructed them to lie to homeowners, for example, by telling them that their paperwork was missing or incomplete even when it was. In other situations, they were instructed to tell homeowners that their files were “under review” even though they were not.
(3) BoA also schemed to force homeowners into re-filing their documents, such as by refusing to act on them for 30 days and claiming they were “stale.” The purpose was to restart the time period on the process, delay the eventual modification, and make more money under the original mortgage terms.
(4) Twice a month, BoA employees would conduct a “blitz” in which they denied loan modifications whose paperwork was more than 60 days old. The employees claim BoA instructed them to invent reasons for denying loan modifications and submit them to the Treasury Department, and they were told to falsify and purge HAMP documents from their files.
(5) BoA gave out bonuses to employees who denied HAMP modifications and sent homeowners into foreclosure.
(6) Some employees were reportedly fired for giving homeowners accurate information about their mortgage modifications.
Although BoA denied the allegations, they were made by its employees located all over the country, and they are consistent with homeowners’ reports that they were told to re-file their HAMP paperwork. Much of the conduct alleged in the affidavits occurred after BoA signed onto the $25 billion robo-signing settlement, meaning it might be criminally liable.
If you have a mortgage with BoA, and you were denied a loan modification, you should discuss the situation with an experienced Las Vegas bankruptcy lawyer.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-880-5554 to set up your free consultation.