Mortgage-Deal Spoils Divide Winners From Losers

This is priceless. These attorney generals and others make big bank off the people who were frauded by these banks. While there pockets grow , nothing has been done to help the ones who lost homes and were abused the most. pretty sad, when the people sworn to protect you  are also stealing  from you as well. The only people  deserving of this money are the people who were hurt, not the lawyers, not the AG's, not the treasury , and not the governments, yet, they are the ones prospering and the rest are left to struggle with loss, homelessness, no jobs, no food. What the hell is wrong with this country? We are on a spiral trip to nowhere.

Bloomberg News

Mortgage-Deal Spoils Divide Winners From Losers in U.S. Capitols

By Linda Sandler, Freeman Klopott and Christie Smythe February 03, 2014

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Hundreds of millions of dollars in mortgage-fraud settlements from JPMorgan Chase & Co. and other banks are providing a windfall to state attorneys general -- and creating a new class of political winners and losers.

In New York, Attorney General Eric Schneiderman learned in November his office was getting $613 million from JPMorgan, about triple his annual budget. He said he’d use the cash to reimburse victims and finance investigations. Governor Andrew Cuomo, a fellow Democrat, questioned Schneiderman’s hold on the money and a dispute over the cash ensued.
California Attorney General Kamala Harris, seen by some as a potential gubernatorial candidate in 2018, used her $300 million share from JPMorgan to reimburse public-pension funds for losses on mortgage investments. Lisa Madigan, her Democratic counterpart in Illinois who considered a run for governor this year, applied her $100 million share to the state’s pension systems, which face a worst-in-the-nation $100 billion shortfall. She trumpeted her move with a news release.

Story: JPMorgan’s Profit Is Bruised Ever So Slightly by Madoff Settlements

“Politics is all about money and power,” said Peter Henning, a former lawyer with the Securities and Exchange Commission and a professor at Wayne State University Law School who has written about the JPMorgan settlement. “AG stands for almost governor.”

Schneiderman’s Pursuit

In November 2013, the U.S. and five state attorneys general reached an agreement with the bank that it would pay $13 billion to settle claims that it sold risky mortgage securities. JPMorgan, admitting that it and companies it bought hadn’t sufficiently informed investors about risks, paid a $2 billion civil penalty. It also paid almost $6 billion to resolve lawsuits by the Federal Housing Finance Agency, the National Credit Union Administration and the Federal Deposit Insurance Corporation.
New York got $613 million to settle a 2012 case Schneiderman mounted against the bank and its Bear Stearns unit. As the most active in pursuing -- and suing -- the bank, he won the biggest pot. That was enough to aggravate natural tensions with the state’s top political figure.

Story: Dimon Gets 74 Percent Raise After Billions in Fines

“When the settlement gets big enough, you have a fight,” said James Tierney, a former Maine attorney general who runs a program about the position in Columbia University’s law program. “Both bring to the table the legitimate functions of their office.”

Springboard Office

The stakes were heightened by another reality: the past two governors, Cuomo and Eliot Spitzer, were elected after taking on Wall Street institutions as attorneys general.
“It’s counterintuitive, but the chance for sparks to fly is greater when the governor and attorney general are from the same party,” said former New York Attorney General Bob Abrams, who is now a partner with Stroock LLP in New York. “There is a natural suspicion and paranoia, and there can be competing ambitions.”

Story: Beware of Gangsters Filing Tax Returns

Such rivalries have been going on for decades, said Tierney, a key adviser in the $246 billion settlement among the tobacco industry, the U.S. government and 46 attorneys general in 1998.
In the 15 years since, governors used the money for bridges, tax relief and other purposes not related to tobacco control or health that the attorneys general had proposed.
States have received $116 billion in payments and spent only 7.7 percent on tobacco prevention programs, said Peter Fisher, vice president for state issues at the Campaign for Tobacco Free Kids.

Story: The Heckman Equation: Early Childhood Education Benefits All

Snookered Attorneys

“A lot of public officials at the time made some grandiose promises about spending the money on tobacco prevention and health,” Fisher said. “The reality turned out to be quite different.”
In later deals, the attorneys general protected their plans. In February 2012, the U.S. and 49 attorneys general reached a $25 billion settlement with five top mortgage servicers, including Bank of America (BAC:US) Corp., whom they accused of signing foreclosure documents without verifying them.
The servicers were told to use as much as $21.5 billion to cut homeowners’ principal payments, refinance loans at lower rates and compensate 2 million people who lost their homes because of malfeasance. Money going directly to the states would protect consumers against foreclosures.

Story: The Incredible Shrinking Credit-Default Swap Market

Staking Claims

Schneiderman structured New York’s share of the JPMorgan (JPM:US) agreement to give his office broad powers to determine how the funds would be spent, according to the settlement.
The original deal gave Schneiderman control of 85 percent, with 15 percent going to the state treasury. It said he could use the funds to aid those hurt by the foreclosure crisis and “otherwise promote the interests of the investing public.” He could spend money on housing counselors, mediation, and anti-blight projects, the settlement said.

Cuomo balked and argued with Schneiderman that the money is meant to relieve all taxpayers, and the attorney general isn’t allowed under state law to spend it as he sees fit, according to an administration official familiar with the discussions who requested anonymity because the dispute was private.

Schneiderman and Cuomo worked out the dispute over the first $163 million installment of the four-year payout just before the governor announced his state budget Jan. 21. The attorney general will put half into the treasury, and Cuomo and the legislature will spend it on housing. Schneiderman also agreed to go through the state contracting process and the oversight that comes with it when spending the funds.
Matt Mittenthal, a Schneiderman spokesman, said the deal was a “product of positive negotiations.”

Struggle Ahead

Three other payouts will follow, leaving Schneiderman with hundreds of millions to disburse in remaining years. Cuomo expects to fight over the division of each, said another aide who requested anonymity because the matter is private.
Tierney said the conflict between attorneys general and governors can make for good government.
“Most states want the friction between the two,” he said. “They want the AG to stand up to the governor, because it’s a check on the governor’s power.”
The case is People of the State of New York v. J.P. Morgan Securities, 451556-2012, New York State Supreme Court (Manhattan).
To contact the reporters on this story: Linda Sandler in New York at lsandler@bloomberg.net; Freeman Klopott in Albany at fklopott@bloomberg.net; Christie Smythe in Brooklyn at csmythe1@bloomberg.net
To contact the editors responsible for this story: Andrew Dunn at adunn8@bloomberg.net; Stephen Merelman at smerelman@bloomberg.net; Michael Hytha at mhytha@bloomberg.net

Time we all go Federal

LISTEN UP. ITS TIME TO STOP USING STATE COURTS WITH THIS MORTGAGE ABUSE FROM THE BIG BANKS AND PRIVATE HEDGE FUNDS. THESE CASES NEED TO HEAD TO FEDERAL COURTS, WHERE THE JUDGES KNOW THE LAW. THIS WILL ALSO STOP THE ABUSE OF STATE COURTS ILLEGALLY GIVING HOMES AWAY AND BANKS FROM ABUSING THE SYSTEMS.

Ruling may ease loan modification runaround for homeowners facing foreclosure

After falling behind on mortgage payments in 2008, Joyce McNair reached an agreement with Bank of America to modify her loan and made 14 payments under a trial payment plan, but now is threatened with foreclosure again. A recent court ruling may help homeowners like McNair hold lenders to such agreements. 

Joyce McNair thought she'd made a breakthrough when Bank of America agreed to try modifying her mortgage to help her avoid losing her Beaverton home in foreclosure.
After six months on a plan that would make her payments a little more affordable, the bank said, it would make the modification permanent. So McNair, whose own mortgage company had failed during the housing crash, made all six payments -- then eight more while waiting for paperwork to show up finalizing the arrangement.
Instead, she received notices that her loan had been transferred and that her new loan servicer would foreclose unless she paid $231,000 in back payments and fees by the following month.
Trial payments that go on endlessly or that squeeze a few thousand dollars more from the homeowner before the lender forecloses anyway were a common complaint among struggling homeowners trying to save their homes and get back on their feet during the recession with the help of the federal Home Affordable Modification Program, or HAMP. Consumer advocates and regulators say problems converting trial modifications continue today.
Banks have argued that the trial payment plans aren't a binding contract and that completing the trial was never intended to offer a guarantee about permanent modification.
A new federal court ruling upends that argument.
The 9th Circuit Court of Appeals in San Francisco ruled this month that lenders are required under HAMP to make a loan modification permanent upon completion of a set of trial payments. Consumer attorneys and advocates say the decision is a big win for homeowners in the 9th Circuit, which includes Oregon and Washington.

Far-reaching effects

The decision in Corvello v. Wells Fargo is binding for lower federal courts in 9th Circuit states. It's not binding for state courts, but consumer attorneys say it's likely to be taken into consideration by courts that had routinely rejected modification cases in the past. "Corvello is a very important decision and should put lenders in the 9th Circuit on notice that they can't play bait and switch with borrowers anymore," said Kelly Harpster, a foreclosure defense attorney in Lake Oswego.
In the case, plaintiffs Phillip Corvello and Karen and Jeffrey Lucia, whose two cases were consolidated before the appellate court, each said Wells Fargo offered them a trial-payment plan. They said they made the required payments but were never offered the permanent modifications they had been told would be forthcoming.
"It allowed banks to avoid their obligations to borrowers merely by choosing not to send a signed modification agreement, even though the borrowers made both accurate representations and the required payments," the court ruled.
The court called the idea that Wells Fargo could be allowed to keep the trial payments unfair and an "injustice" that would be averted by its ruling.

Bank's reaction

In a statement, Wells Fargo downplayed the significance of the decision: "The 9th Circuit did not rule on the merits of the underlying cases and found only that the District Court should consider the arguments put forth by the plaintiffs. Wells Fargo has strong defenses to those arguments and is prepared to present its case in the district court." The decision follows a similar ruling by the 7th Circuit Court of Appeals in Chicago.
According to government reports on HAMP, 88 percent of completed trial modifications are successfully converted to permanent modifications after an average of three or four months of trial payments.
For the rest, a lot can go wrong.
The Consumer Financial Protection Bureau, a federal agency created in 2011 to oversee the nation's largest banks and financial firms, said this month that its reviews of mortgage servicers have uncovered disorganized and missing files for foreclosure mitigation programs, including loan modifications.
And without naming specific institutions, it faulted lenders for sloppy handling of documents when mortgage servicing is transferred, including "lack of controls" regarding the handling of documents, including modification paperwork.

"Breach of contract"

When McNair's paperwork finally did arrive in March 2013, the documents had expired even before they were sent via FedEx. She contacted the bank and was assured new documents were on the way, she says, but those never arrived. Instead, she received a notice that her loan servicing had been transferred to Nationstar Mortgage's portfolio. Rather than picking up where Bank of America left off, the new servicer threatened foreclosure unless she paid off her default within a month.
Bank of America did not return phone calls seeking comment. Nationstar declined to comment specifically on McNair's loan.
"If there's a valid modification in place when (a loan) comes to us, then we would honor that," Nationstar spokesman John Hoffman said.
Whether the trial payment plan constitutes a contract has been a point of contention virtually since the HAMP program launched, but courts rarely sided with homeowners, said Terry Scannell, a Portland foreclosure defense attorney.
"Before, judges were chucking these cases out," Scannell said. "To get one to trial on any theory was a win."
Now, Scannell says, homeowners can bring a contract claim in federal court against mortgage servicers who fail to offer a modification once the homeowner has met the terms of a trial-payment plan.
"And the statute of limitations on a contract in Oregon is six years," Scannell said. "If this happened to them and they were foreclosed on, I think they've got a breach of contract claim."
McNair has retained an attorney and set aside the amount she'd be making in payments in the meantime.
And for the former mortgage professional, the lapses seem like double the betrayal.
"I did good mortgage loans. There was no greater joy than seeing people get into their new house," she said. "Right now I feel like I couldn't put someone in a loan in good conscience."
-- Elliot Njus

Banc of America Capital Management, LLC, et al.

07/31/2013 02:25 PM EDT

Order Directing Disbursement of Fair Fund

Guess who is going to distribute it? None other than Deutsche Bank !!


http://www.sec.gov/litigation/admin/2013/34-70082.pdf

Surprise, surprise.

(Photo: Pranav Bhatt)Surprise, surprise.
Just when we thought the big banks couldn’t hit a new low, they do.
Six former employees of Bank of America have come forward, alleging that the big bank intentionally denied eligible homeowners mortgage loan modifications, and lied to those homeowners about the status of their mortgage payments and documents.
Bank of America allegedly used these dirty tactics to lead homeowners into foreclosures and in-house loan modifications, both of which helped reap massive profits for BOA’s bottom-line.
The employees who have come forward have also said that the big bank rewarded customer service representatives with hefty cash bonuses and gift cards to popular stores when they foreclosed on homes.
According to a lawsuit filed in federal court, a Bank of America employee who placed ten or more mortgage accounts into foreclosure a month could get up to a $500 bonus.
The lawsuit also alleges that the bank punished representatives who did not hit foreclosure target numbers or who objected to the bank’s tactics. In some cases, those employees who didn’t foreclose on enough people were fired.
This latest jaw-dropper out of Bank of America comes just days after it was revealed that the bank was also using deceptive mailers and sales pitches to sell consumers on mortgage refinancing plans that could actually add tens of thousands of dollars to the cost of a borrower’s loan.
Despite these latest revelations about foreclosure targets, lies and dirty tactics, nobody at Bank of America is worried about going to jail.
That’s because our elected lawmakers in Washington, particularly Republican lawmakers, are scared straight by the idea of going after the big banks and going after corporate America.
Yet, these same lawmakers are just fine going after the big bad government, especially when it comes to things like the IRS controversy.
But, let’s look at the parallels between the IRS controversy and the latest news coming out of Bank of America.
With the IRS controversy, IRS agents deliberately went after and applied higher scrutiny towards potentially political organizations, liberal and conservative, applying for 501c3 tax-exempt status.
At Bank of America, employees allegedly intentionally denied eligible homeowners loan modifications, and pushed them into foreclosure to get a bonus.
With the IRS scandal, one IRS official took the fifth when testifying before Congress, but is the subject of both a criminal and an internal investigation.
At Bank of America, it’s alleged that customer service representatives were rewarded for lying to homeowners about the status of their mortgage payments and documents.
Despite the obvious similarities between these two scenarios, only one is being investigated loudly and publicly by Congress; The IRS controversy.
So, why is Congress willing to go to the ends of the earth to get to the bottom of the IRS scandal, but refusing to lift a finger when it comes to investigating America’s big banks?
Could it be that employees of the IRS do not make multimillion dollar campaign contributions to members of Congress?
Could it be that employees of the IRS don’t spend hundreds of millions of dollars on lobbying?
And even the media, which is supposed to be an impartial and unbiased source of news and information, is afraid to go after big banks when they commit crimes.
The media would rather drag on ad nauseum about manufactured witch hunts like the IRS controversy, than discuss how the big banks, which American taxpayers have already saved once, are back up to their same old dirty tricks, and threatening to bring down the entire American economy once again.
America’s collective attitude towards the big banks and corporate America needs to change.
Bank of America should not get a slap on the wrist, while our elected officials in Washington waste their time and our tax dollars harassing unionized government employees at the IRS.
Congress and the Department of Justice should hold the big banks accountable for their actions, because America can’t afford another big-bank-caused economic and financial disaster

Lost is America

Last week, I detailed bombshell revelations from Bank of America whistle-blowers, in which former employees of the bank detailed systematic fraud and deceptive practices inside their loan modification department — including bonuses and Target gift cards for staff who racked up foreclosures.
Now, another new lawsuit, featuring a separate whistle-blower, contains additional remarkable revelations – and may shed light on Bank of America’s strategy in getting out from under the mountain of legal exposure and costs in which it now finds itself. Simply put, the bank seeks to pocket quick cash and evade practices set forth in major settlements – by cashing out of the subprime mortgage servicing business. The result would be to leave struggling homeowners back at square one, with even fewer protections to avoid foreclosure.
First, some background. Over the past year, non-bank servicers like Nationstar and Ocwen have been buying up servicing rights to millions of mortgages, gradually positioning themselves to become the biggest companies in the space. These non-bank servicers, which process monthly payments and deal with foreclosures but do not originate loans, have an asset not available to their big bank colleagues: They haven’t yet been officially caught scamming customers. Therefore, they are not a party to the various servicer settlements brought by state and federal regulators, and they need not submit to those settlement guidelines. This includes rules like establishing a single point of contact for borrowers, stopping foreclosure operations when a modification is in process (ending what is known as “dual track”) and facilitating proper payment processing.
All of this has come to a head in a class-action lawsuit filed by Leonard Law Office in Massachusetts against Green Tree Servicing, a non-bank servicer based in St. Paul, Minn. As detailed by an insider at Bank of America in a packet of documents, in January 2013, BofA sold servicing rights to 650,000 mortgages (worth $93 billion) to the parent company for Green Tree.

Like Nationstar and Ocwen, Green Tree is not part of any servicing settlements, nor do they have to abide by any guidelines set by those agreements, even though the loans they purchased were subject to those guidelines when they were in the hands of BofA. Moreover, as a non-bank servicer, Green Tree has traditionally had less stringent oversight from federal regulators, though the Consumer Financial Protection Bureau is fixing to change that.
Of course, servicers like Green Tree, Nationstar and Ocwen have terrible reputations as among the worst servicers in the country (worse than Bank of America, if you can imagine that). Among the charges Leonard Law Office made against Green Tree were claims that the servicer imposed illegal fees to process any kind of payment; failed to process mailed payments on time; harassed borrowers by calling them at all hours of the night and using abusive language to try to collect on debts; and delayed or denied timely modifications. These practices violate such federal laws as the Fair Debt Collection Practices Act, the Telephone Consumer Protections Act, and others. Complaints about Green Tree’s practices litter theInternet.
And some complaints have gone to court, like the case of a Florida widow who claimed that Green Tree debt collectors called her husband, as well as his co-workers and relatives, nine times a day about a mortgage debt. Nationstar and Ocwen have seen their share of complaints as well. One innovative Ocwen scam involves sending homeowners a check for $3.50, and claiming that cashing the check automatically enrolls the customer in an appliance insurance plan, which costs $54.95 a month.
Here’s where Bank of America comes in. According to a bank insider, this is part of a deliberate effort to flip the servicing rights for a quick buck and get out from under the scrutiny of the various settlements. “Brian Moynihan, Ron Sturzenegger and Tony Meola are well aware of the reputations of these servicers,” says the insider, referring to Bank of America’s CEO and two high-level executives. “Ron is a dealmaker, not an operations guy. He was brought in to sell the stuff.”
Sturzenegger runs Bank of America’s Legacy Asset Servicing Division, $1 trillion or so of the shakiest loans at the bank.  By selling off servicing rights, suddenly the bank doesn’t have to comply with settlement practices, nor do they have to increase staff for compliance purposes. So not only do they get some ready cash, they lower their labor costs.
Sturzenegger worked with Meola, the executive of Fulfillment Operations, to put together the “Bulk Transfer Program,” selling off these mostly delinquent loans to disreputable servicers like Green Tree and Nationstar (the more reputable ones didn’t want any part of them). But they only sold the “subservicing” rights. Non-bank servicers like Green Tree service the loans, but Bank of America held onto the so-called master servicing rights. This means that the bank still gets some of the profits from servicing the loans, and none of the responsibility to comply with settlements. Bank of America added a million-plus current loans to the mix of shakier loans to sweeten the pot for the subservicers.
In the most damning charge, the insider noted that, “It may mean that any modification currently in process with BAC (Bank of America) will not be recognized and the borrower will proceed into foreclosure.” This is almost certainly true, and it’s a very common practice. Servicers who purchase servicing rights are not obligated to follow through on prior agreements with homeowners on loan modifications that have not yet been made permanent. So the homeowner, who thought they were well on their way to saving their home, instead has to start all over with a new servicer.
Here’s one example from a former Bank of America customer in Puget Sound, Wash., whose switch to Green Tree voided his short sale and put him back in modification hell. Even if the borrower was getting special treatment because of a natural disaster like Hurricane Sandy, that treatment would be voided once the new subservicer entered the picture. The Fitch rating agency has recognized the danger of selling off distressed servicing rights to these non-bank operations, saying in a research note that “the growth and outsized scale of larger nonbank servicers may pose challenges to a potential orderly transfer of servicing.” Struggling homeowners will bear the brunt of these challenges.
Once Charles Giannotti, a friend of Bank of America CEO Brian Moynihan, found out that his servicing transferred to Nationstar, he emailed in a fit of rage. “Are you aware of the fact that your bank is turning its customers over to a processor that based on the complaints posted appears to not only lack basic competency but also poor customer service?” Giannotti fumed. This set off a flood of CYA emails within the bank from senior executives, responding to Moynihan’s queries about the scheme.
Regardless of how Bank of America resolves this situation, the damage to homeowners has already been done. Homeowners don’t get to choose their servicer – they just get passed around at the whim of big mortgage companies. And every time the servicing rights get transferred, they have to deal with a whole new set of practices. If they were fighting foreclosure at the time of the switch, then they have to start over, under typically disadvantageous circumstances. And that’s especially true when their new servicer sits outside the glare of strict oversight.
Bank of America’s reputation is already unsalvageable. But avoiding requirements they were forced to make to homeowners to compensate for an initial round of illegal practices, by selling the servicing rights off to fly-by-night organizations that specialize in abusing customers, just about takes the cake. And they’re profiting from it, too.

Lost is America  -- The banks found a way to hide and steal our homes and the SEC, FDIC, CFPB, US AG, OCC, are all hiding their heads in the sand..but wait for it......Wall Street will soon go belly up and where does that leave everyone than?

Gotta love Bank of America -NOT

Bank of America Corp. opened a unit in India to review home-valuation reports as it seeks to rebuild share in U.S. mortgages at a lower cost, said four people with knowledge of the move.
Workers in the new Bangalore office follow checklists to determine if appraisals are complete, said the people, who requested anonymity because they weren’t authorized to comment. The firm also eliminated jobs of licensed U.S. workers in its LandSafe business, the appraisal division of the Charlotte, North Carolina-based company, which made $78.7 billion in loans last year, the people said.

Enlarge image

Bank of America Corp. has paid the most of any U.S. lender to put the housing mess behind it, spending more than $45 billion to resolve claims from shoddy loans and foreclosures after buying Countrywide for $2.5 billion in 2008. Photographer: Davis Turner/Bloomberg

“One of the biggest problems in the mortgage business is all the paperwork involved, and how do you engineer it to reduce the bottlenecks,” said Bert Ely, an independent banking consultant in Alexandria, Virginia. “With offshoring, the potential for problems is always there, but it’s hard to be critical for trying to minimize costs.”

Lenders around the world have vowed to boost revenue and curb spending to make up for sluggish loan growth and new regulations. Bank of America, which spent more than $45 billion to settle disputes tied to defective mortgages and foreclosures, is among the most aggressive cost-cutters with Chief Executive Officer Brian T. Moynihan planning to save $8 billion a year. The firm slipped from being the biggest U.S. mortgage lender in 2008 to fourth last year.
Other firms have added staff in lower-cost cities. Goldman Sachs Group Inc., the New York-based investment bank, saw headcount in places including Bangalore and Salt Lake City almost double since 2007 to 22 percent of employees, CEO Lloyd Blankfein said in November. Barclays Plc (BARC) said today it planned to move 4,000 more jobs overseas and to lower cost locations by 2015 to save as much as 250 million pounds ($381 million).

Staff Cuts

LandSafe has more than 2,000 associates in the U.S., according to the Plano, Texas-based firm’s website. In addition to appraisals tied to new home loans, it also conducts valuations on Bank of America’s portfolio of delinquent loans, of which the company had 667,000 on March 31. In February, the lender cut about 5 percent of LandSafe employees, saying they weren’t needed as overdue loans fell.
Licensed reviewers, who check the accuracy of appraisal valuations and can earn more than $100,000 a year, were among those who lost their jobs, the people said.
Bank of America’s program prevents paperwork errors from delaying loan applications, said Terry Francisco, a spokesman for the second-biggest lender by assets. The overseas completeness checks, begun in August, don’t replace in-depth reviews done by licensed U.S. staff, he said.

Overall Consideration

“The overall consideration isn’t necessarily cost, although cost can be an element,” Francisco said. “What we’re looking for is if there are patterns in certain areas where it looks like the reviews aren’t necessarily needed anymore.”
The U.S.-based reviewers, who typically had at least five years of experience as appraisers, are required to confirm accuracy by doing independent assessments that conform to industry standards, the people said. The checklists in India cover 17 items such as whether the appraiser remembered to sign the report and include photographs of rooms, according to a copy obtained by Bloomberg.
Relying more on checklists may increase the odds of defective reports going undetected, said Karen Mann, a Discovery Bay, California-based appraiser who testified for the Financial Crisis Inquiry Commission’s 2011 report. The FCIC examined the causes of the housing bubble and subsequent 2008 credit crunch.

Knowing Shortcuts

“Experienced, licensed appraisers know the shortcuts people take, so those reviewers can be invaluable,” Mann said. “With the checkboxes, they’re looking for things that don’t really have anything to do with values.”
LandSafe workers complained last year about the decline in review work and its impact on their pay and job security, said a person with direct knowledge of the internal discussions. In response, LandSafe executive Tracy Sanderson said management couldn’t increase the number of reviews because of the expense, the person said. Sanderson didn’t return calls seeking comment.
Bank of America was forced to pay the most of any U.S. lender to put the housing mess behind it after Moynihan’s processor Kenneth D. Lewis bought Countrywide Financial Corp. in 2008. The firm has finished paying the “lion’s share” of costs tied to faulty mortgages, Moynihan said in March.
Under Moynihan, 53, the firm pulled back as it struggled to fend off regulators and lawsuits. The company made $78.7 billion in home loans last year, or about 4 percent of the market, compared with $315 billion in 2008, when it had more than 20 percent, according to newsletter Inside Mortgage Finance.

Building Back

“We’ve been building that back up, and expect to be in the 5 percent area as we exit the second quarter,” Chief Financial Officer Bruce Thompson told analysts on June 11, adding that he expected market share would continue to rise. San Francisco-based Wells Fargo & Co. (WFC) is ranked first, creating almost 1 in 3 U.S. mortgages last year.
Lenders are under pressure to reduce costs because demand for refinancings, the biggest source of volume for the firms, is falling amid surging mortgage rates. The average rate for a 30-year fixed loan rose to 4.46 percent from 3.93 percent, the biggest one-week increase since 1987, McLean, Virginia-based Freddie Mac said yesterday in a statement.
Bank of America, which doesn’t disclose how many workers are outside the U.S., had 262,812 employees as of March 30, or 5.7 percent fewer than a year earlier. Its shares fell 1.2 percent at 4:15 p.m. in New York to $12.86 paring the gain in the past 12 months to 66 percent. The bank has plunged from a closing high of $54.90 in 2006.


PRICELESS THEY OUTSOURCE JOBS THEY TOOK FROM US. 

Bank of America workers say the bank lied

By Michelle Conlin and Peter Rudegeair

June 14 (Reuters) - Six former Bank of America Corp employees have alleged that the bank deliberately denied eligible home owners loan modifications and lied to them about the status of their mortgage payments and documents.

The bank allegedly used these tactics to shepherd homeowners into foreclosure, as well as in-house loan modifications. Both yielded the bank more profits than the government-sponsored Home Affordable Modification Program, according to documents recently filed as part of a lawsuit in Massachusetts federal court.

The former employees, who worked at Bank of America centers throughout the United States, said the bank rewarded customer service representatives who foreclosed on homes with cash bonuses and gift cards to retail stores such as Target Corp and Bed Bath & Beyond Inc.

For example, an employee who placed 10 or more accounts into foreclosure a month could get a $500 bonus. At the same time, the bank punished those who did not make the numbers or objected to its tactics with discipline, including firing.

About twice a month, the bank cleaned out its HAMP backlog in an operation called "blitz," where it declined thousands of loan modification requests just because the documents were more than 60 months old, the court documents say.

The testimony from the former employees also alleges the bank falsified information it gave the government, saying it had given out HAMP loan modifications when it had not.

Rick Simon, a Bank of America Home Loans spokesman, said the bank had successfully completed more modifications than any other servicer under HAMP.

"We continue to demonstrate our commitment to assisting customers who are at risk of foreclosure and, at best, these attorneys are painting a false picture of the bank's practices and the dedication of our employees," Simon said in a email, adding the declarations were "rife with factual inaccuracies."

Borrowers filed the civil case against Bank of America in 2010 and are now seeking class certification. The affidavits, dated June 7, are the latest accusations over the mishandling of mortgage modifications by some top U.S. banks.

Mortgage problems have dogged Bank of America since its disastrous purchase of Countrywide Financial in 2008. The bank paid $42 billion to settle credit crisis and mortgage-related litigation between 2010 and 2012, according to SNL Financial.

Bank of America and four other banks reached a $25 billion landmark settlement with regulators in 2012, following a scandal in late 2010 when it was revealed employees "robo signed" documents without verifying them as is required by law.

But problems have persisted. Since 2012, more than 18,000 homeowners have filed complaints about Bank of America with the Consumer Financial Protection Bureau, a new agency created to help protect consumers. Recently, the attorney generals of New York and Florida accused Bank of America of violating the terms of last year's settlement.

The government created HAMP in 2009 in response to the foreclosure epidemic and to encourage banks to give homeowners loan modifications, allowing some borrowers to stay in their homes.


THE BLITZ

The court documents paint a picture of customer service operations where managers roamed the floor with headsets, able to listen into any call without warning. Service representatives were told to lie to homeowners, telling them their paperwork and payments had not been received, when in reality they had.

"This is exactly what's been happening to homeowners for years," said Danielle Kelley, a foreclosure defense lawyer in Florida. "No matter how many times they send in their paperwork, or how often they make their payments, they simply can't get loan modifications. They wind up in foreclosure instead."

The former employees said they were told to falsify electronic records and string homeowners along in foreclosure as long as possible. The problem was exacerbated because the bank did not have enough employees handling modifications, adding to the backlog of cases purged during the "blitz" operations.

Once a HAMP application was delayed or rejected, Bank of America would offer an in-house alternative, charging as high as 5 percent when the loan could have been modified for 2 percent under HAMP, according to an affidavit by William Wilson, who worked at the bank's Charlotte, North Carolina office.

Wilson, who was a case management team manager, said he told his supervisors the practices were "ridiculous" and "immoral." He said he was fired in August 2012.

Bank of America said it was not at liberty to discuss personnel matters.