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Bank of America Lawsuit on Loan Modifications

On June 14, Bloomburg News published an article on a class action lawsuit filed for homeowners who had been denied loan modifications due to Bank of America deliberately blocking the review of their loans for modifications and forcing them into foreclosure. As I began to write this blog (it’s 9:15 a.m.) the news radio show, State of Nevada was interviewing the Pro Publica reporter who had also written an article on this lawsuit.

Former employees of Bank of America have filed statements in the class action lawsuit that employees were given incentives to decline requests for loan modifications, even if the borrower did qualify for a modification. Cash bonuses were given to employees who put at least 10 borrowers into foreclosure and those who declined requests for modifications were given gift cards.

HAMP, the loan modification arm of the Making Home Affordable (MHA) program launched in 2009. At that time, Bank of America was the largest mortgage servicer in the country. The class action lawsuit alleges that Bank of America deliberately sabotaged homeowners’ attempts to modify their mortgages.

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