Tumblr Icon RSS Icon

Whistleblower Claims Bank Of America Intentionally Blocked Homeowners From Getting Federal Mortgage Help

Posted on  

"Whistleblower Claims Bank Of America Intentionally Blocked Homeowners From Getting Federal Mortgage Help"

Share:

google plus icon

Since the housing bubble burst, the federal government has implemented a host of programs aimed at helping Americans avoid foreclosure. So far, the results of those programs have been underwhelming.

One of the biggest disappointments has been the Home Affordable Modification Program (HAMP). Meant to save 3-4 million homeowners from foreclosure, the program has reached just a fraction of that number, has barely spent any of the money allocated to it, and has been bogged down by bank intransigence.

Bank of America has been one of the worst banks for getting homeowners through the HAMP program. This has mostly been blamed on the bank’s incompetence, but a whistleblower suit in Colorado alleges that Bank of America was intentionally steering customers away from HAMP:

The complaint unsealed Wednesday was filed by whistleblower Gregory Mackler, a Colorado resident who said he worked alongside Bank of America executives while an employee at Urban Lending Solutions, a company to which Bank of America contracted some of its HAMP work.

While working at Urban Lending, Mackler said he saw BofA and its loan servicing subsidiary, BAC Homes Loans Servicing LP, implement “business practices designed to intentionally prevent scores of eligible homeowners from becoming eligible or staying eligible for permanent HAMP modification.”

The bank and its agents routinely pretended to have lost homeowners’ documents, failed to credit payments during trial modifications and intentionally misled homeowners about their eligibility for the program, the complaint alleged.

According to the complaint, Bank of America “let through just enough HAMP modifications to avert suspicion and allay congressional critics, while not enough to incur any substantial losses to its own bottom line.”

Back in 2009, ThinkProgress caught Bank of America violating HAMP by pushing eligible borrowers into the bank’s own, more expensive, private loan modification program. At the time, we pushed Treasury to more closely police the bank’s practices, to ensure it was complying with HAMP and providing maximum help to homeowners. If the allegations in the whistleblower case are true, that certainly didn’t happen.

« »

By clicking and submitting a comment I acknowledge the ThinkProgress Privacy Policy and agree to the ThinkProgress Terms of Use. I understand that my comments are also being governed by Facebook, Yahoo, AOL, or Hotmail’s Terms of Use and Privacy Policies as applicable, which can be found here.