Just a couple of months ago, a couple in Florida filed a lawsuit against
banking giant, Bank of America. Bank of America, along with many other
big banks who were “bailed out” by the federal government
in 2009, were required to agree to some stipulations as a condition of
receiving the bailout money. Bank of America received $45 billion up front,
with another $100 billion promised; however, a requirement of the money
was participation in the HAMP (Home Affordable Modification Program) which
was meant to help consumers modify their current home mortgages as a means
of keeping their homes.
In short, the government intended the HAMP program to help financially
struggling homeowners avoid foreclosure by modifying their loans to a
level which was both affordable in the present, and sustainable for the
long term. There were certain incentives built in to the HAMP program
for borrowers, services and investors. Borrowers who met the following
criteria were considered eligible for the HAMP program:
- Those who were current or less than 60 days delinquent and determined to
be in imminent default, or 60 days or more delinquent.
- Those who had an affirmation of financial hardship.
- Those who were in foreclosure, in active bankruptcy, or in pending litigation
regarding their mortgage.
- Those who were performing under another workout arrangement.
- Those who had a monthly housing expense-to-income ratio greater than 31
percent of their verified gross monthly income.
Delaying Tactics Used on Consumers by Bank of America
In June, 2017, prior to the current lawsuit filing against Bank of America,
more than 100 Florida homeowners filed a lawsuit claiming BOA “fraudulently delayed or destroyed their application to modify the terms
of the mortgages to steal their homes and sell them at a profit.” The current lawsuit claims that Bank of America used delaying
tactics on consumers, claiming their documents were either incomplete
or altogether missing when they were not, or by claiming the documents
were under review when they were not.
In fact, homeowner applications were regularly shredded when they had not
even been reviewed by BOA, or even taken home by bank managers to conceal
the fact they were received at all. One manager stated he had deleted
“thousands of homeowner HAMP app files from the databases of BOA
—as many as 6,000 in a single day.
Case Managers Ordered to Clean out Backlogged Hamp Applications by Shredding
As often as twice a month, Bank of America even ordered case managers to
clean out backlogged HAMP applications by denying any file in which the
financial documents were more than two months old—even files in
which the homeowner had properly provided all required documents and complied
fully with all HAMP rules and regulations.
Perhaps even more alarming, Bank of America employees were given quotas
for placing a specific number of accounts into foreclosure—even
accounts in which the borrower had properly complied with the HAMP Trial
Period Plan. Some employees were even given a monetary bonus for placing
ten or more accounts into foreclosure during a single month.
Plaintiffs v. Bank of America
The current plaintiffs allege that after they experienced significant financial
hardship—due at least in part to the poor economy in 2008-2009,
they contacted Bank of America and requested a HAMP modification, at which
time they were given false statements of fact concerning their eligibility
by a BOA employee. In 2011, they were advised by a senior loan representative
to refrain from making their regular loan payments, as being “past
due” on their mortgage was a prerequisite for a HAMP loan modification.
This was a false statement—default was
not a requirement for HAMP, only that a default was reasonably foreseeable
and the loan representative was fully aware of this fact.
False Statements Made to Plaintiffs
The plaintiff relied on the statements made by the loan representative,
and stopped making their loan payments, falling into default. Subsequently,
the plaintiffs made trial payments on their mortgage, as instructed by
the loan representative; however, BOA refused to apply the payments to
their account. The plaintiffs were provided a HAMP application, and they
subsequently completed the application, returning it to Bank of America
with all requested accompanying financial documents.
The plaintiffs were falsely informed by the loan representative that the
documents were not current—on more than one occasion. The loan representative
who continuously misinformed the plaintiffs, as well as other BOA employees
were well aware the statements were false—some employees were even
given cash and restaurant and retail gift cards for meeting quotas for
declining HAMP applications. Plaintiffs lost their home, the equity they
had in their home, and the trial payment monies they paid as directed
by the loan rep.
Bank of America Profited by “Stealing” Homes from Consumers
Obviously, Bank of America profited, not only by keeping the “trial”
payments sent in by the plaintiffs, when they had no intention of approving
a HAMP loan modification, as well as from forcing the plaintiffs into
foreclosure and selling the plaintiffs’ homes for a profit to the
bank. Bank of America also charged the plaintiffs for unnecessary property
inspections while the plaintiffs were still living in their home—fees
which are not permissible under HUD guidelines. In short,
Bank of America committed fraud and made false statements and claims to
the plaintiffs on more than one occasion so they could illegally profit.
Contact Our Philadelphia Consumer Protection Lawyers
If you or a loved one lost your home to foreclosure after being denied
a BOA HAMP modification, it could be beneficial for you to speak to an
experienced consumer attorney about your options. To learn more about
your legal options or to schedule a free consultation call the Philadelphia
consumer protection lawyers at Golomb & Honik today at 1-800-355-3300
or 1-215-985-9177 or fill out our confidential Contact Form.
The national consumer protection lawyers at Golomb & Honik have successfully
represented individuals in Philadelphia, Pennsylvania, New Jersey, and
throughout the United States.