BofA Gave Bonuses to Foreclose on Clients, Lawsuit Claims

.
“At best, these attorneys are painting a false picture of the bank’s practices and the dedication of our employees,” Simon said. “While we will address the declarations in more depth when we file our opposition to the plaintiffs’ motion next month, suffice it to say that each of the declarations is rife with factual inaccuracies.”
The lender unsuccessfully tried to dismiss the complaint in 2011. U.S. District Judge Rya Zobel ruled that the case could proceed while dismissing some claims. Zobel is scheduled to consider the class-certification request at an Aug. 1 hearing.
Loan collectors who put at least 10 customers into foreclosure, including those who were in trial modifications, were given a $500 bonus, said Gordon, who worked at Bank of America for more than four years. Other rewards included gift cards for retailers including Target (TGT) and Bed, Bath and Beyond, she said.

‘Falsify Information’

Another former employee, Theresa Terrelonge, said loan officers were given restaurant gift cards and $25 cash awards for denying loan applications. The incentives moved workers to improperly reject applicants, Terrelonge said in a May 15 statement.
“I witnessed employees and managers change and falsify information in the systems of record, and remove documents from homeowners’ files to make the account appear ineligible for a loan modification,” said Terrelonge, a loan servicing representative. This allowed managers to meet quotas for closed cases, she said.
Bank of America instructed employees to delay applications and mislead customers “as part of a deliberate practice of stringing homeowners along,” lawyers said in a June 7 filing.

Private Loans

The law firm is in contact with more than 1,000 Bank of America customers who said they completed requirements for a trial and were denied permanent modifications, attorney Steve Berman of Hagens Berman Sobol Shapiro LLP said in a court filing. Lawyers supported their claims with declarations from the seven employees, many of whom said they had access to the bank’s software, which allowed them to understand the process.
“I personally reviewed hundreds of files in which the computer systems showed that the homeowner had fulfilled a trial-period plan” before being denied, said William Wilson, a loan manager who left the firm in August. “On many occasions, homeowners who did not receive the permanent modification that they were entitled to ultimately lost their homes.”
The bank offered some applicants who should’ve gotten HAMP modifications a more-expensive private loan that charged as much as 5 percent interest, compared with 2 percent under the U.S. program, said Wilson, a case-management leader overseeing 13 others.
The bank held a twice-monthly “blitz” in which thousands of cases were improperly denied, Wilson said. Employees would certify to the U.S. Treasury Department false reasons for rejections, he said.

New York

Bank of America was among five mortgage servicers that reached a $25 billion settlement last year with the U.S. and states to resolve claims of abusive foreclosure practices. The deal provided monetary relief to homeowners and establishes standards for servicing mortgages.
Those rules restrict banks from foreclosing on a home while a borrower is being considered for a loan modification, and set procedures and timelines for reviewing loan-modification applications from homeowners.
New York Attorney General Eric Schneiderman said in May that he intended to sue Bank of America and Wells Fargo & Co. (WFC), the largest U.S. mortgage lender, for violating terms of the settlement related to processing modification applications.
Schneiderman’s office has been alerted to the filing of the former employees’ statements, said Linda Tirelli, a White Plains, New York-based lawyer who represents clients seeking modifications from Bank of America. She included the documents in a letter to the attorney general dated June 13.

‘Sitting Around’

The banks aren’t “fulfilling their obligations under the national mortgage settlement,” Tirelli said. “After a three-month trial basis, they’re supposed to promptly deliver a loan modification. My clients have been sitting around for six, seven, eight months and still don’t have a permanent modification.”
Bank of America said last month that New York’s claims are “entirely baseless” and argues that under the settlement, the state has no right to file an enforcement action against the company.
The case is In Re Bank of America Home Affordable Modification Program (HAMP) Contract Litigation, 10-md-02193, U.S. District Court, District of Massachusetts (Boston).