Whistleblower: Bank Defrauded Taxpayers

While countless, everyday Americans continue to struggle with impending foreclosure in South Florida, one bank is again facing allegations of wrong doing at the highest level.

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As our South Florida foreclosure defense attorneys understand it, Bank of America is being accused of preventing homeowners from obtaining lowered mortgage payments from a federal program, even though it was reaping the financial rewards of participation.

The allegations were reported by the media earlier this month, when a whistleblower complaint was unsealed in federal court. The complaint is part of the $1 billion settlement reached between the New York U.S. Attorney’s Office and Bank of America in February. Specifically, the settlement has to do with allegations that the bank violated the federal False Claims Act, which is outlined in 31 U.S.C. 3729. This act essentially allows the government to collect punitive and compensatory damages for anyone who files a false or fraudulent claim to the government – as the banks have become notorious for doing.

All of this too comes after another settlement for $25 billion that was reached between five major banks and attorneys general from 49 states, addressing widespread mortgage fraud over the last several years.

What this newest revelation essentially comes down to is this: That the bank actively worked to defraud the Federal Housing Administration by exaggerating appraisals and inflating claims that involved the Home Affordable Modification Program (HAMP). The whistleblower said he was working closely with bank executives when they reportedly set out to intentionally stop countless homeowners from receiving HAMP benefits, which would have significantly lowered their mortgage payments and likely allowed scores to remain in their homes.

The complaint alleges that as a matter of routine practice, agents for the bank would act as if it had lost important documents, they would fail to mark payments that had been made and they would intentionally mislead homeowners about whether they qualified for the program. They let only enough people into the program to avoid garnering the suspicion of the federal government. That way, they could continue to collect government rewards for their participation in HAMP.

It’s cliche to say the bank was having its cake and eating it too – but that’s exactly what was happening.

This is unsurprising to our Miami foreclosure defense attorneys, who know that banks are capable of almost anything, especially if it’s in their own interest – regardless of whether it’s legal or going to have a negative impact on those who are struggling.

The whole scenario illustrates why it is so crucial for people who are considering a Miami foreclosure to contact a skilled attorney who is familiar with the banks’ tactics, and can help you avoid some of the common pitfalls that have ensnared so many others.

If you’re battling foreclosure in Miami or the surrounding areas, contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991.

Additional Resources:
Whistleblower says BofA defrauded HAMP, By Jessica Dye, Reuters

Banks Face Few Sanctions for Role in Miami Foreclosure Crisis, Feb. 22, 2012, Miami Foreclosure Lawyer Blog