Today's front page New York Times story about Bank of America illegally breaking into people's homes and taking their possessions is a painful reminder that many American families are spending the holiday season desperately trying to save their homes. The system seems stacked against ordinary people, but the tide is beginning to turn with the attorney generals stepping up their investigation into mortgage fraud, growing public anger, more-and-more lawsuits and this week's confirmation from WikiLeaks that it plans to release a trove of internal Bank of America documents early next year.
What WikiLeaks has is a mystery, but we already know a lot about Bank of America practices that are hurting Americans and prolonging the economic crisis. Here are some of the big issues that impact families and communities, from a report card that PICO National Network and National People's Action put out last week on Brian Moynihan's first year as CEO.
Illegal and unnecessary foreclosures: Bank of America operates the largest foreclosure mill in the history of the United States. It has denied hundreds of thousands of families a fair opportunity to save their homes, more than any other bank in America. According to media reports it has repeatedly taken people's homes illegally. After participating in the HAMP program for nearly two years, Bank of America has offered permanent loan modifications to less than 80,000 families. That is less than one-in-five who are eligible for help! (Source: U.S. Treasury Department, Making Home Affordable Program, Servicer Participation Report Through October 2010.)
Stringing borrowers along and then taking their homes: Bank of America has by far the worst record of stringing homeowners along for months and then taking their homes. Under the HAMP program banks are supposed to offer homeowners permanent loan modifications after they have completed three months of a trial modification. More than two-thirds of all families with trial modifications from Bank of America have been waiting for longer than six months for a permanent loan modification. Bank of America's conversion rate to permanent loan modifications is the lowest of all of the major banks. And of those who were denied help under HAMP, only 14 percent received alternative in-house modifications from Bank of America compared to 31 percent at JP Morgan Chase, 27 percent at Citibank, and 40 percent at Wells Fargo.
Refusing to prevent foreclosures even when it is good for homeowners and investors: Bank of America puts its interest as a servicer ahead of the interests of investors, homeowners and the economy by consistently refusing to modify principal. Most borrowers at-risk of foreclosure are underwater on their mortgages, but very few of the loan modifications by Bank of America reduce principal, which is often essential for people to be able to stay in their homes and continue paying their mortgages. Principal reduction is good because investors continue to collect mortgage payments and avoid costly foreclosures, and fewer foreclosures take place, helping stabilize the housing market. Bank of America receives subsidies from the Treasury for lowering principal balances. However the bank still refuses to do so in all but a fraction of cases.
Neglecting vacant property: It is likely that Bank of America owns hundreds of thousands of vacant properties. Many are not being maintained. Bank of America/Countrywide is listed as one of the worst banks in caring for lender-owned properties on the website Lender Offender.
Exorbitant bonuses: Bank of America is on track to pay $35.1 billion in bonuses & compensation for 2010, more than any other bank in the country. In 2009, after taking tens of billions in taxpayer bailouts, Bank of America's five highest paid executives made $57.4 million. Outsized bonuses for top executives are expected to be even higher this year. By choosing to pay out lavish bonuses, Bank of America is putting its bankers ahead of even its own shareholders. While Bank of America is on track to pay out $35.1 billion in 2010, its common stockholders only received a one penny dividend for each of the last four quarters, even though the bank has been free to pay more. Under TARP rules Bank of America was restricted to paying a one penny dividend to its common stockholders. After returning its TARP funds in December 2009, Bank of America has been free to pay shareholders higher dividends, but has consistently chosen to spend the money on bonuses instead.
Bad Customer Service: Bank of America has the worst customer service performance of the eight largest servicers in the Treasury's Making Home Affordable Program. It has the longest hold times, the highest abandoned call rate, and longest time period to resolve complaints. So many people have reported having to send Bank of America paperwork over and over that the bank is synonymous with lost documents.
Choking off lending to small businesses: Despite taking billions of dollars in taxpayer bailouts, Bank of America and the other big Wall Street banks have continued to choke off credit to small businesses, which are the source of most of the potential job growth in the country. A recent study of small business lending in California found that Bank of America's SBA lending fell from 2,304 loans in 2007 to just 74 in 2009. Bank of America and Citibank topped the list of major banks that had reduced their lending. While SBA data for 2010 is not yet available, small businesses continue to report that access to capital is a growing problem. Bank of America, like the other mega- Wall Street banks, is also earning record profits based on the ability to borrow money from the Federal Reserve at extremely low interest rates and lend it back to the Treasury at higher rates. Bank of America has returned to profitability without doing its part to lend money to help the economy recover.
Financing predatory payday loan sharks: Bank of America continues to maintain a dual credit system where it does business in lower-income and minority communities through predatory payday loan operators that charge exorbitant interest rates. Under Brian Moynihan Bank of America has maintained its stake in four of the top five publicly held payday lenders (Advance America, EZCorp, Cash America, and Dollar Financial). Bank of America provides a $265 million line of credit at a 3% interest rate to Advance America, which turns around and makes loans at 400% interest rates to working families.
Packaging bad loans and selling them as good loans to investors: Investors, including the Federal Reserve Bank of New York, are pressing Bank of America to buy back a portion of $47 billion worth of mortgages that are alleged to have not confirmed to underwriting standards and were not serviced correctly. Brian Moynihan has described the bank engaging in "hand-to-hand" combat to defend abusive and fraudulent mortgage loans.
Countrywide purchase: Brian Moynihan has continued to defend the purchase of Countrywide, one of the nation's most notorious subprime lenders. "When we get through the work on the management side, people will come to the same conclusion that this (purchase of Countrywide) is a great thing for customers and a great thing for the bank," he says. "Right now, we're still absorbing the body blows."
Distorting democracy: Bank of America spent more than six million dollars in 2010 to win special favors from elected officials. This included $1.6 million in federal political donations, $883,000 in donations to state-level candidates, and $3.6 million on lobbying.
Visit www.crimeshouldntpay.com to add your name to a petition asking the nation's attorney generals to take a tough stand in their mortgage fraud investigation against Bank of America and other big banks.
Follow Gordon Whitman on Twitter: www.twitter.com/piconetwork
Post 1 - "LOOK UP THE ALLEGED SERVICER AND INVESTOR ON ANY PROPERTY…"
(with any address you can look up on MERS website who claims to be the servicer and investor in your note)
Post 2 - GREAT REFERENCE GUIDE: MAX GARDNER, FORECLOSURE LAWYER AND BANKRUPTCY BOOTCAMP INSTRUCTOR
(if you need hope fighting the banks)
http://deadfed.com/
(both on right side of blog)
It's so bizarre to have Acorn involved front and center in the foreclosure wars when it's your guy, Barack Obama, who has shuffled his feet for two years. Too bad you weren't free to vote for Hillary Clinton in 2008, she would have prioritized the foreclosure issue right away.
And where in all of this is the Chamber of Commerce, which supposedly represents Small Businesses? Too busy contributing millions of dollars to influence the Mid-term elections? Too busy soliciting money from foreign interests? What a joke they are....and what saps we are.
People who are underwater on BofA mortgages are doubly hosed. I wish them good luck, and suggest getting the heck out. Rebuilding is easier then riding the wreck to ruin.
btw- the term is Attorneys General, as the attorneys are plural and the general in singular.
Here is what BofA did wrong: it loaned money to people, what a bunch of criminals! Now those people won't pay it back, and you all blame BofA. If you think that is right, don't ever ask to borrow money from me.
BofA has the right to run its business without government interference, including HAMP a program which attempts to force lenders to forgive loan amounts (which is unconstitutional). It is up to BofA to decide what is best for its business. If ignoring HAMP and foreclosing is against their interest, that is their legal right. Just like the right for Americans to borrow money they can't pay back, to gamble, invest in the stock market, we have a Constitutional right to act stupidly.
Payday loan sharks are legal and profitable, don't blame BofA, those people want to borrow that money. Make it illegal if you want, though note that people don't like the government to stop them from doing things that aren't good for them.
Remember what a disaster Prohibition was. People demand the right to be self-destructive. That's freedom, that's capitalism.
All parties in this mess carry equal responsibility for the debacle. And, each has there own consequence for their poor judgement regardless of their original intentions. What you are ignoring is that this crisis was driven by lies on all sides, and has caused devestating losses to the engine of our economy. Crappy credit risk indviduals can't get more credit, and that's a good thing: but currently, credit qualified small and mid-sized businesses can't get credit either due to banks being held hostage by their idiocy during the housung boom and credit/mortgage crisis. But the banks that were big enough got bailed out by Bush and Paulson (BofA got $178Million interest free for making crappy mortgage plays) and weren't held responsible for their part.
Small and medium sized companies create and maintain 70+% of the jobs in this economy. If you're sick of the "bums" in society getting unemployment and banks getting government payouts then tell you GOP Rep and Senator to help small business rebuild this economy.
Those people who say that are clearly not clued on reality of the situation. The middle class is prey for these corporations and politicians and some citizen are accessories.
Just today BoFA told me they lost my payment I made a week ago electronically. I had to get my bank to send proof.
If you or I did half the things they did we would be in jail.
Their strategy has seemed to be motivated by a general hatred and loathing of the public and a 'core-mission' desire to do as much damage as metaphysically possible to America's working class. IMHO this was not simply greed. Nor was it even greed mixed with abuse of hoarded power--for glory's sake alone. It was a form of mass-destruction which defies standard categorization. It was a 'slash-and-burn' mission similar (in economic terms) to the 'Khmer Rouge'. Hopefully, the pending Wikileak will get the public enraged enough to clean some streets of them. They are not the 'devil', they are the devil's banker.
Clinton's repeal of Glass Steagall was simply terrible.
And what made it worse? Bush's Credit Derviative Modernization Act
Next the Supreme Court says Corporations are People.
Bank of America Employees, the rank and file not at the top? They are being taken to the cleaners too. No match to a 401K, health insurance costs on their side rise every year