Bank of America Gave Bonuses to Modification Department Employees for Pushing Loans into Foreclosure

Explosive new allegations have emerged in the ongoing litigation against Bank of America (BoA) in relation to intentionally botched loss mitigation procedures, most especially in relation to the government-sponsored Home Affordable Modification Program (HAMP).  Several whistleblower former employees from BoA’s loss mitigation department have come forward asserting a laundry list of egregious abuses of both their borrower and the U.S. taxpayer. Some of the highlights of this scheme include the revelation that BoA frequently lied to borrowers seeking help with their loans, denied loan applications for invented reasons, and provided sizable monthly bonuses to employees successful at diverting borrowers into foreclosure. This excerpt from ProPublica nicely summarizes the allegations: 

Five of the former Bank of America employees stated that they were encouraged to mislead customers. “We were told to lie to customers and claim that Bank of America had not received documents it had requested,” said Simone Gordon, who worked at the bank from 2007 until early 2012 as a senior collector. “We were told that admitting that the Bank received documents ‘would open a can of worms,’” she said, since the bank was required to underwrite applications within 30 days of receiving documents and didn’t have adequate staff. Wilson said each underwriter commonly had 400 outstanding applications awaiting review.

Anxious homeowners calling in for an update on their application were frequently told that their applications were “under review” when, in fact, nothing had been done in months, or the application had already been denied, four former employees said.

Employees were rewarded for denying applications and referring customers to foreclosure, according to the statements. Gordon said collectors “who placed ten or more accounts into foreclosure in a given month received a $500 bonus.” Other rewards included gift cards to retail stores or restaurants, said Gordon and Theresa Terrelonge, who worked as a collector from 2009 until 2010.