Homeowners Denied HAMP Loan Modifications
In the midst of an improving real estate market and a downturn in distressed homeowners, Bank of America received another black eye in its handling of distressed homeowner files.
According to several former Bank of America employees, Bank of America employees regularly lied to homeowners seeking loan modifications, denied applications for made-up reasons and received rewards including bonuses and gift cards for sending homeowners to foreclosure.
The former employees, who ranged from customer service to managers, gave statements as part of a class action lawsuit brought on behalf of homeowners who sought to avoid foreclosure through the Home Affordable Modification Program (HAMP) but were purposely bungled by B of A employees.
Bank of America issued statements denying the statements and stated that the truth would come out in the court trial.
An Onslaught Of Loan Modifications In 2009
When the HAMP program debuted in 2009, Bank of America had significantly more eligible homeowners than the next largest bank. As a result of this onslaught of loan modification requests, the former employees mentioned that the bank often misled them and denied applications for bogus reasons.
One recent study reported that about 800,000 homeowners would have qualified for HAMP if Bank of America and the other largest servicers had done an adequate job of handling homeowner applications.