Employees at Bank of America were given cash bonuses and gifts for meeting quotas of mortgage holders sent into foreclosure, claims Simone Gordon, a former employee who has filed a lawsuit in Boston.
Bloomberg reports that Bank of America allegedly improperly disqualified applicants to the Home Affordable Modification Program, or HAMP.
“We were regularly drilled that it was our job to maximise fees for the bank by fostering and extending delay of the HAMP modification process by any means we could,” Gordon said. Managers instructed staff to “delay modifications by telling homeowners who called in that their documents were ‘under review,’ when in fact, there had been no review,” she said. The bank has denied the plaintiffs’ allegations.
Bank of America’s attorney has said that these characterizations of their loan practices are “false.” The bank unsuccessfully tried to dismiss these claims in 2011.
Another former employee, Theresa Terrelonge, said loan officers were given restaurant gift cards and $25 cash awards for denying loan applications. The incentives moved workers to improperly reject applicants, Terrelonge said in a May 15 statement.
“I witnessed employees and managers change and falsify information in the systems of record, and remove documents from homeowners’ files to make the account appear ineligible for a loan modification,” said Terrelonge, a loan servicing representative. This allowed managers to meet quotas for closed cases, she said.
Loan officers that put at least 10 customers into foreclosure got $500 bonuses.
Bank of America has already spent $45 billion on claims stemming from the foreclosure crisis, we’ll see how this one goes.
Business Insider Emails & Alerts
Site highlights each day to your inbox.