Did Bank of America Scheme to Steal Homes from Consumers?

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.