Did you spend the past couple days so suspicious of the NSA that you had forgotten to set aside just a little bit of your suspicion for the banks? Don’t worry, we can fix that pretty quickly! Turns out Bank of America may have been foreclosing on homeowners who qualified for in-house loan modifications and the government-sponsored Home Affordable Modification Program because — get this! – it was more profitable to put the homeowners out on the street:
Six former Bank of America Corp employees have alleged that the bank deliberately denied eligible home owners loan modifications and lied to them about the status of their mortgage payments and documents.
The bank allegedly used these tactics to shepherd homeowners into foreclosure, as well as in-house loan modifications. Both yielded the bank more profits than the government-sponsored Home Affordable Modification Program, according to documents recently filed as part of a lawsuit in Massachusetts federal court.
Yes, we know how shocked — SHOCKED — you all are to hear of this, given that there are currently 4,000,000 people in this country who may have been wrongfully foreclosed upon and many bank foreclosures occur while homeowners are in the process of loan modification. It is probably even more shocking that many of these people may have been wrongfully foreclosed upon so the bank can make a few extra bucks, given that BofA could afford to quadruple CEO Brian Moynihan’s pay package but a couple years ago. But once again, this is why we are not the CEO’s of a big company! You do not make money by helping borrowers modify home loans and avoid foreclosure; you make it by kicking them out of their homes and then selling their homes and keeping all the money, even if the homeowners have spent decades building up equity and pouring their savings into making home improvements.
The former employees, who worked at Bank of America centers throughout the United States, said the bank rewarded customer service representatives who foreclosed on homes with cash bonuses and gift cards to retail stores such as Target Corp and Bed Bath & Beyond Inc.
For example, an employee who placed 10 or more accounts into foreclosure a month could get a $500 bonus. At the same time, the bank punished those who did not make the numbers or objected to its tactics with discipline, including firing.
About twice a month, the bank cleaned out its HAMP backlog in an operation called “blitz,” where it declined thousands of loan modification requests just because the documents were more than 60 months old, the court documents say.
Your Wonkette is not old enough to remember, but apparently bank executives and hedge fund managers and other rich people in the financial industry used to actually go to jail when they broke the law. Legend has it that 1,000 bankers were charged by the justice department during the S&L crisis in the 80s, and 800 people–many of them high-level executives, actually went to the slammer and did hard time.
Given that we did not come out of this crisis with a similar thirst for justice, and no one has gone to jail, our prediction re: this latest revelation is as follows:
1. Elizabeth Warren will try to do something about it, perhaps through meetings with relevant regulatory bodies or by trying to pass some kind of bill.
2. The bill will never make it out of committee.
3. We will discover ever more egregious examples of wrongdoing, the perpetrators will issue a measly statement that neither affirms or denies wrongdoing, pay a meager fine, and then do it all again.
But in the meantime, we can’t wait for the next nice time video of Elizabeth Warren yelling at bank regulators.