Bank of America let down homeowners trying to stop foreclosure
Millions of Floridians lost their homes during the housing crisis. It was hard enough for people struggling with financial challenges, but it’s more infuriating to find out that many foreclosures might have been prevented if some banks had been fairer with their foreclosure practices. It’s no secret that some major lenders made it more difficult for homeowners facing foreclosure to keep their homes. The National Mortgage Settlement addressed concerns by homeowners and consumer advocates that these banks used fraudulent and deceptive procedures to push homeowners into foreclosure.
Bank of America was one of these banks. Signed statements by several former bank employees state that Bank of America rewarded employees for foreclosing on homeowners, misled those looking for government-sponsored loan modifications, and regularly denied applications for mortgage relief for fraudulent reasons. The government’s Home Affordable Modification Program (HAMP) is also under scrutiny for allegedly delaying assistance to millions of homeowners hoping to stop repossession through affordable loan modifications. Bank of America reportedly received $992 million in HAMP-related payments as incentive to foreclose on homeowners, rather than ensure they received HAMP aid.
A former manager with Bank of America said that employees who challenged Bank of America’s foreclosure policies were often fired. As a result, he said, many homeowners who could have received a HAMP modification were forced to sign an expensive in-house modification with the bank.
In these uncertain times, these types of actions against homeowners are unconscionable. Lenders should be attempting to help families stay in their homes, rather than making it harder to get assistance. It’s hoped that a current class-action lawsuit on behalf of homeowners across the country who have been victimized by mortgage abuse will put a stop to the types of practices that cause financial ruin for families, while enriching banks.
Source: eCreditDaily, “Lawmaker: Review Bank of America’s ‘Outright Abuse’ of Consumers,” June 18, 2013