Bank of America mortgage modifications: Questions raised!

Did Bank of America encourage employees to delay and deny mortgage modifications?

Anyone who has been involved in trying to get a mortgage modification knows that the loan servicers make it very difficult to get approval. They ask for more and more paperwork, and then claim they never got it; or they got it, but lost it. They do this again and again while the foreclosure proceeds. Most of us have thought this was simply incompetence, but now we have some evidence that this was intentional, at least at Bank of America.

The Wall Street Journal reports that a former employee who is being deposed in federal court in Boston said he was instructed to “…maximize fees for the bank by fostering and extending delay of the Home Affordable Mortgage Program (HAMP) by any means we could.”

In order to comply with this order, former employees have said that they requested paper work the bank had already received; told homeowners that their documents were “under review” when no such review was going on; and improperly disqualified applicants. Employees were given quotas for delaying and denying HAMP applications, and in return for meeting them they were given cash bonuses and gift cards.

The HAMP program’s main benefit is a reduction in interest rates to reduce mortgage payments to 31% of your income. For more information, check the US Government’s Making Home Affordable site.

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