Bank of America Cheats on Loan Modifications | Georgia Debt Law

Bank of America Cheats On Loan Modifications

Thief Getting AwayThe cracks are starting to appear in the National Mortgage Settlement. The cracks indicate a blatant cheating of loan modifications and practices through Bank of America.

The Miami Herald has reported that Florida’s Attorney General, Pam Bondi believes that Bank of America has failed “to follow the rules of a national mortgage settlement reached last year over the practice of robo-signing during the height of the foreclosure crisis.”

In her letter to Bank of America, Attorney General Bondi says that the bank may have violated the settlement by:

  1. “failing to assign a single point of contact to the borrower ‘throughout the loss mitigation, loan modifications and foreclosure processes…until such time as Servicer determines in good faith that all loss mitigation options have been exhausted’;
  2. failing to comply with the settlement’s dual tracking restrictions which prohibit borrowers from being referred to foreclosure while a completed loan modification application is pending;
  3. failing to comply with certain timing requirements in cases where a borrower has been referred to foreclosure but makes a loan application within thirty days of referral and, during that time, contrary to the settlement, Bank of America moves for judgement or an order of stay while the application or an appeal from a denial is pending; and
  4. failing to oversee foreclosure counsel to ensure counsel have appropriate access to accurate and complete information from the bank’s records necessary to perform their duties.  If properly informed, counsel presumably would respond to the borrower’s loss mitigation inquires during the course of litigation.”

New York Attorney General Eric Schneiderman has threatened sue Bank of America and Wells Fargo for the same violations.

Propublica has posted an article entitled, “Bank of America Lied to Homeowners and Rewarded Foreclosures, Former Employees Say”.  The article reports that “Bank of America regularly lied to homeowners seeking loan modifications, denied their applications for made-up reasons, and were rewarded for sending homeowners to foreclosure, according to sworn statements by former bank employees.”

As a Georgia bankruptcy attorney, I have heard clients complain that their bank will falsely claim that documents necessary for the loan modification were never faxed to them on time.  My consumers in Georgia have felt cheated and abused by the loan modification processes because they complied with every demand of the bank and still ended up in foreclosure.

Thank goodness Chapter 13 is available to consumers to save their homes from foreclosure.  If it was not for Chapter 13, thousands of homeowners would lose their homes because of bad bank practices.

The future does not look so good for Bank of America right now.  As the great Southern philosopher Dusty Rhodes once said, “Payback is hell daddy!”

Other posts you might be interested in reading.

1.  What is Chapter 13?

2. What is Chapter 7?

3. How much does it cost to file?

4.  How do I stop a garnishment?

5.  How do I stop a foreclosure?