BofA Allegedly Modified Mortgages To Keep Complainers Quiet

In an attempt to clean up its battered image, Bank of America allegedly provided mortgage assistance to customers willing to drop complaints about the bank over the course of the housing bust, according to reports from Arizona officials.

Amidst a foreclosure crisis that saw more than 2.6 million foreclosure filings in 2011 alone, the allegations highlight an unpredictable and haphazardly-policed mortgage modification process -- the venue that struggling borrowers use to change the terms of their mortgage so they can more easily pay off debts.

In the absence of a strong federal modification program -- the White House's modification plan has generally been viewed as a disappointment -- independent mortgage modification scams have become more common, and major financial firms have placed more emphasis on their own modification services.

The latest accusations against BofA stem from a 2010 lawsuit over BofA's loan-modification practices. After taking control of Countrywide Financial in 2008, BofA allegedly misled borrowers about the circumstances under which they could qualify for loan modifications, according to Bloomberg Businessweek.

A probe into the matter led by Arizona attorney general Thomas Horne turned up a dozen cases in which BofA appears to have waived borrowers' debts, paid their legal fees or modified their mortgages -- but only if the borrowers agreed not to make statements "that defame, disparage or in any way criticize" BofA, and furthermore agreed to "remove and delete any online statements" about the issue, including "postings on Facebook, Twitter and similar websites," according to court documents.

This isn't the first time BofA has faced court claims over its loan modification practices. In August, the state of Nevada brought a comprehensive lawsuit against BofA that accused the bank of misleading homeowners who sought mortgage modifications, among other allegations of misconduct. In other previous cases, homeowners have accused the bank of reneging on its obligations to borrowers looking to modify their loans.

The specific charges in Arizona come at a moment when BofA is already mired in legal troubles and grappling with poor public relations. In total, BofA paid roughly $14 billion in legal settlements related to mortgage cases last year, though it was still able to turn a $2 billion profit in the final quarter of 2011, according to the Associated Press.

Lawyers for BofA have said that borrowers can still get loan modifications without signing non-disparagement agreements of the type unearthed by the Arizona attorney general's office.

Comments

[Frank Sturm]

01:12 PM on 02/19/2012

It is amazing that the Cheating from BOA continues....I applied for a making homes affordable modification, after falling 3 months behind in August of 2010. It was reccomended to me by BOA. I had simply asked to defer the 3 payments to the end of my loan, I had lost 90,000.00 when companies who owed me went bankrupct. I have been in the process 18 months, due to the mirror foreclosure process I am now 21 months behind. (they will not accept any payment while in foreclosure). On January 31 BOA sold my house at auction while I was in the mod process, Freddie Mac is now involved, saying this was done in error. Now I may have to go back to mod, from the replys on this site...sounds like the mod process even if granted sucks too......BOA are liars and thieves!

[Frank Sturm]

01:19 PM on 02/19/2012

Its not like I dont qualify for the Loan Modification, I have been able to replace the yearly lost revenue. If most think that this process is fraudulent, wait until the governement, Freddie and Fannie, look to unload all the homes the governement will own. They will sell the properties back to BOA and all the others for pennies on the dollar and all the big banks will get to make even more money off it. That is what happened with the trailer homes during the crisis in the Gulf, they were sold to the governement at jacked up prices and then sold back to the manufactures for 200 dollars each.

[Charles Deihl]

08:51 PM on 02/18/2012

Wells Fargo wanted us to sign a agreement that even though we paid the modification payments on time and in Full , that they could still Foreclose on us out of their Best Interest,3 days after receiving that agreement that was NEVER signed by us, A Sheriff came to the Door with Sheriff Notice of Sale & to Vacate the Property.They never intended a True Modification.So BEWARE of what you sign,it all has Criminal Intent writing all over it.

[yobie1]

07:11 PM on 02/07/2012

We did get a loan mod from BOA, only having 12,000 left on the house, however,never did receive any type of paper work showing the break down on the loan and nothing to sign. The payment statement (bill) came and it show that this 12,000 loan is for 39 years and $1.00 (yes one dollar) goes to the Principle and $99,00 goes to the interest. We have called and called and always told its not my department, and gives us another number to call. One Lady did say that looking at this loan on the computer this loan will never be paid in full it is a neg loan and looks like it was not done proper. Now what?

[flowerfamily5]

10:53 PM on 01/30/2012

We have been trying endlessly to get a home loan modification for medical reasons through BofA for our AZ home. In November BofA told us they would do a "trial modification" only for 3 months and then offer us a permanent solution. We are now at the end of our "trial" and BofA refuses to talk to us about our house. I began calling them on January 10th at which time I was told the rep that was handling our file was no longer there and so our file was in the process of being "reassigned". They told me to wait a week and call back. I called back a week later only to get a voicemail for someone who was supposed to be our Account Manager. Finally after 2 days of leaving messages for that person I received a call back only to be told that she couldn't help us but that we had to call someone else to discuss our file. I was given the direct number and extension of a person that I now have been leaving messages for since January 16th daily but no phone call back! I actually got through to the women's extension one time and heard laughing and talking in the background. I stayed on the phone listening to them joke around for a few minutes before I said the rep's name at which point the background went silent and the phone hung up. I still have yet to talk to her.

-A.T

[medicallibrarian]

04:28 PM on 01/29/2012

Richard Cordray needs to get ahold of them and he will. They are on his radar and the radar of the Justice Dept.

[bob riversmith]

09:26 AM on 01/28/2012

After reading through all the post here, and a lot of other material on this issue - I come to one conclusion: What needs to happen is a mass STOP PAYMENT MOVEMENT.

These criminals got bailed out ... it's time the people bailed themselves out and simply stopped paying their mortgages, en masse.

[swampangel51]

09:20 AM on 01/28/2012

Obamas so tight with the banks a stick of dynamite couldn't separate them!

[cmr11]

09:06 AM on 01/28/2012

free market and all that republican cr@p right?

[rickcraft55]

08:39 AM on 01/28/2012

No way I would retract my comments about BofA!

[ccsysglf]

08:27 AM on 01/28/2012

just 1 more example. people factor for reform...

[dcb64]

07:47 AM on 01/28/2012

This company has engaged in enough shady practices that it should just be broken up, and parts sold off. this is a major problem in the untied states because of the big banks engage in illegal activity without any real consequences, nobody goes to jail, and the stockholders pay the fines, and the CEO remains free. I do not understand why these firms can not just called criminal enterprises by the government. It's insane. if it was a bunch of Italians they would call it the mob, prosecute and break it up.

[Djnmjohnson]

02:27 AM on 01/28/2012

God this is what has happened to us!!! B of A told us we were approved for a modification and to wait for the paper and new payment amount, waited, waited, called, and called finally after REALLY pressing them about not being comfortable with not making payments and taking soo long and not hearing anything, THEN they told us we didnt qualify and we were now three months past due!!! Our FIRST time being late in 7 years!!!! ours was one of those loans B of A aquired through countrywide. They still havent gotten their heads out of their asses!! ONE year later still no remedy, we attended a BofA conference in which they said it was the governments fault!!! The stress they have caused in inexcusable, charges should be brought against this shiesty institution!!

[musterseeds]

07:47 PM on 01/27/2012

$5.00 feesss = 1 galons gas.

[ajustman]

05:19 PM on 01/27/2012

Everyone was trying to make a fast buck and it blew up! End of case

[teabagmetos]

04:53 PM on 01/27/2012

At 915 am some morning while employees are sipping their coffee, The doors of B of A should be chained shut and bars put over the windows. Everybody in it should be fingerprinted, issued Orange jumpsuits and their mugshots taken. Police should be combing through file cabinets finding out who stole what from whom.

[BonnieDoon]

05:42 PM on 01/27/2012

Not everyone.

Go after the execs who were the architects of the "bubble" that artificially drove the prices of housing so high and, then, burst. They strategized, designed, created, executed, benefitted from and now shirk responsibility and accountability for the havoc they’ve wreaked on our country and economy.


The perpetrators need to be investigated, arrested, indicted, tried, convicted and sentenced to real jail time for the crimes they have committed.

[PrintSmith]

03:32 PM on 01/31/2012

It wasn't the executives of the TBTF Banks that built the bubble; it was the executives of Fannie and Freddie - at the behest of the general Congress - who earned that distinction. Wasn't it Congress who told Fannie and Freddie that 50% (or was it 60%?) of the mortgages they purchased had to be from lower income demographics or economic recovery zones? Now, unless the banks started finding a way to lend to these groups so that Fannie and Freddie would have some loans to purchase, Fannie and Freddie weren't going to be buying a lot of loans, which, need I remind you, is their only reason for being in business to begin with. The only way to get that done is to change the standards for qualifying for the loans to begin with, right? Once you offer the lower standards to one demographic you then must, in order to comply with other federal regulations, offer them outside of that demographic or risk being sued for "discriminating" against those that don't fall within that demographic.

I agree that there has been a crime committed BonnieDoon - but I think we disagree as to precisely whom the criminals that need to be investigated, indicted, arrested and tried for the alleged crimes, and if convicted sentenced to real jail time.