Foreclosure Filings Brought BofA Staffers Bonuses

June 23, 2013

They say one man's trash is another man's treasure, but Bank of America, it seems, took that saying to a whole new level.

In their case, an action bringing about financial devastation and the loss of a borrower's family home was spun into an opportunity for employees to make a bonus or snag a Target gift card. moneyinhand1.jpg

Our Miami foreclosure lawyers understand that a federal lawsuit alleging systematic denial of home loan modifications now include statements from former staffers of the bank. Some say that they were instructed to lie and say they hadn't received a borrower's paperwork, when in fact they had. Others said that if they could push enough modification requests over to the foreclosure side, they were rewarded with hundreds of dollars in bonuses and gifts.

So while borrowers suffered a head-pounding run-around from banks that insisted paperwork was never received or that their request had been denied for reasons unspecified, workers were given incentive to keep churning out those foreclosures.

One worker said the lender took an active role in ensuring that applicants to the federal Home Affordable Modification Program, or HAMP, were improperly disqualified from a loan modification.

Now bear in mind, these were the loan modifications orders were supposed to be one effort to try to right wrongs and provide homeowners with a more realistic mortgage balance so that they could remain in their homes.

So far, seven former BofA employees have submitted sworn statements testifying that they were instructed to delay the modification process, deny modification requests and push those applications to foreclosure.

When customers would call to get an update about their case, staffers would tell them their case was "under review." But in fact, there was no review. Their cases were stagnant. Nothing was being done. The bank was simply running out the clock, tacking on the interest, wearing thin on the patience and resources of the borrower and the court and trying to get the process to either start over again or be transferred over to the foreclosure stage.

Employees who were successful in having 10 of their cases funneled into foreclosure in a single month were rewarded with cash bonuses and retailer gift cards.

The bank was among five mortgage servicers that last year settled for $25 billion with 49 states in order to resolve allegations of foreclosure abuses. Part of that deal meant that it had to not only provide monetary relief to borrowers, it had to extend loan modifications to those who qualified.

The bank is currently being sued for $45 million by borrowers who say they didn't receive a permanent loan modification, despite abiding by the terms of trial programs mandated by the federal government. More than 1,000 customers said they did everything they were supposed to do, per the terms of the loan modification agreement. And yet, their claims were dismissed anyway, without explanation.

The bank tried to get the complaint dismissed in 2011, but was unsuccessful.

If you're battling foreclosure in Miami or the surrounding areas contact Bruce Jacobs & Associates for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don't miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on "Mortgage Wars," discussing foreclosure topics that matter to YOU.

Additional Resources:
BofA Gave Bonuses to Foreclose on Clients, Lawsuit Claims, June 15, 2013, By Hugh Son and David McLaughlin, Bloomberg

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Foreclosure Lawsuit Filed Against HSBC, June 5, 2013, Miami Foreclosure Lawyer Blog