It probably won’t come as a shock to homeowners with a Bank of America mortgage loan, but in affidavits filed in federal court in Boston last month, several former Bank of America employees claimed they were told to lie to homeowners about the status of their mortgage modification applications. According to the former employees, Bank of America instructed them to lie about whether mortgage modification documentation had been received, whether their application was being reviewed and whether they were eligible for a modification. In some instances the Bank would instruct employees to conduct a “blitz” denial where hundreds of applications would be denied at the same time for fictitious reasons, such as that no documentation had been received when in fact it had been. One employee claimed that about twice a month they were ordered to deny any application more than 60 days old. Similar allegations of mass modification application denials were made last year by a former employee of Litton Loan Servicing.
The former Bank of America employees also claimed that the Bank rewarded them for denying applications and referring mortgages for foreclosure. Employees who placed ten or more mortgages into foreclosure in one month would receive a $500 bonus. Employees with high foreclosure referrals could also be rewarded with gift cards. For more information about the allegations of the Bank of America employees go to www.propublica.org. If you’re still struggling with mortgage modification issues contact us to discuss your options.