Mortgages Blog

Finance Blogs » Mortgages » HUD says BofA ‘hindered’ probe

HUD says BofA ‘hindered’ probe

By Jay MacDonald · Bankrate.com
Monday, June 20, 2011
Posted: 9 am ET

Bank of America came under fire last week when it was revealed that the nation's largest lender "significantly hindered" a federal probe into its foreclosure practices on FHA loans.

The report, filed by a Department of Housing and Urban Development inspector general on June 1, was obtained by Bloomberg News when it was admitted into evidence as part of a lawsuit filed by the state of Arizona, which claims the bank misled homeowners who were seeking loan modifications. The HUD report has not been made public.

In the report, HUD assistant regional inspector general William Nixon is quoted as stating in a sworn declaration: "Our review was significantly hindered by Bank of America's reluctance to allow us to interview employees or provide data and information in a timely manner." Nixon said he prepared the report "in light of possible future litigation."

Here's an excerpt from the Bloomberg story:

"According to Nixon's declaration, when interviews with Bank of America employees were permitted, the presence or involvement of the bank's attorneys 'limited the effectiveness' of the interviews. Attorneys also refused to allow employees to answer questions 'on a number of occasions.'"

The bank's delay in providing "readily available information" also hurt the review of the bank's processes and controls, Nixon said. The information provided in response to two subpoenas wasn't complete, he said.

"These omissions impaired our review because they prevented us from measuring the impact of Bank of America's foreclosure practices," said Nixon.

Bank of America spokesman Dan Frahm defended the bank, saying it cooperated with the HUD inquiry and "any suggestion otherwise is both inaccurate and inconsistent with how we work with all regulators." He noted that BofA had provided HUD access to more than 55,000 pages of material and voluntarily arranged interviews and depositions with two dozen employees.

Federal agencies and attorneys general for all 50 states are investigating how banks service mortgage loans and handle foreclosures. Settlement talks are underway with the five largest U.S. mortgage servicers, including Bank of America, JPMorgan Chase and Wells Fargo.

Follow me on Twitter.

Subscribe to Bankrate newsletters today!

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
33 Comments
D L Clementson
July 03, 2011 at 9:58 am

Check this out. When BAC bought Countrywide most of the mortgage assets that CW showed on the books were not assets at all but rather income from servicing agreements (PSA'S) with the Trusts that CW had sold the notes to.

Countrywide no longer owned those notes and BAC purchased nothing more than the rights and obligations of the servicing agreements held by CW.

In conclusion, BAC has been and continues to run up its fees by pretending to offer loan modifications that it cannot legally grant to anyone and then it attempts to foreclose on property it does not own.

This is a grand conspiricy involving fraud, fraudulent documentation, fraud upon the courts, SEC violations, mail fraud, and an endless number of criminal and civil violations of both state and federal laws and regulations.

This is not rocket science and these criminal acts are clearly evident and easily prosecutable which begs the question of why 50 Attorneys General are spending month after month trying to figure out how to handle this situation with the major Banksters.

The law is the law, for everyone, enforce the laws and prosecute the offenders, it really is that simple. A criminal is a criminal and Lady Justice needs to stop peeking out from underneath her blindfold and send these people to jail for the crimes they have committed and to return the victims of these unprecedented criminal acts to the position they held before becoming victims of these institutions and those controlling them.

Cherie Hartline
June 27, 2011 at 3:08 pm

Wouldn't go near them. Had an account in a bank, about 2 miles away - the phone calls were answered in Utah. The account for my business, which was to be "free" started piling up charges without any notice...no response.

I went into to close the bank accounts after repeated attempts at getting some answers. Their manager cried! She asked what she could do..surely noone is that stupid. They could have made money the old fashioned way, by being HONEST. This happened over 5 years ago...noone wanted to hear that they weren't honest.

KTAYLOR
June 27, 2011 at 2:52 pm

LOAN MODIFICATIONS ARE A SCAM TO KEEP THE HOUSING MARKET IN A DOWNWARD SPIRAL..........SO MANY PEOPLE ARE LOSING THEIR HOMES AFTER BEING PREYED UPON BY THE LENDERS TO DO A LOAN MODIFICATION.....EVERY STORY IS THE SAME....MONTHS AND MONTHS OF LOST PAPER WORK OR DONT HAVE ALL THE CORRECT INFO...ONLY TO TURN BE TURNED DOWN BUT EXPECTED TO PAY BACK HUGHE AMOUNTTS.....THE BANKS ARE GETTING KICK BACKS FOR THE LOAN MODIFICATION APPS......MY QUESTION IS WHY HAS NO ONE POSTED STATS ON HOW MANY FORECLOSURES ARE COMING FROM THE LOAN MODIFICATION PROGRAMS FROM ALL THE MAJOR PLAYER........MAKES YOU WONDER WHOS BEHING ALL THIS CONSPIERCY??????

Roy
June 27, 2011 at 2:51 pm

Mortgage is with Weells Fargo and have absolutely no complaints with this banking institution. Fortuneatley, I am able to make my payments on time and have not been charged a late fee. I feel sad for those in situations that are not easy to be in. I have declared bankruptcy once in 1999 and purchased my existing home in 2009.
Just wanted to let people know that there is hope on the other end of any disaster ... in time, situations will improve.

Richard B. Johnson
June 27, 2011 at 2:13 pm

Bank of America are thieves. This is the record of my PAYCHECK deposit:

Processing BANK OF AMERICA ATM 06/27 #000000001616 DEPOSIT
ACTON REMOTE ACTON MA
$4,400.00 Total deposit
$300.00 Available now
$4,100.00 Credit pending, available to cover debits on 06/27 and for withdrawal the next business day

In the meantime, my automatic payments are causing negative balances in which Bank of America dutifully supplies with my line-of-credit, causing me over $30.00 of "transfer fees" plus interest.

Even when this money becomes a permanent deposit, any attempt to repay the credit-line debit fails to be credited for a week. That way, they get to charge interest for a minimum of a week while they get to use my payoff money free. Thieves, them all.

Bank of America bought my original bank, BayBank, and since then I cannot have a savings account because they charge it $15.00 a month maintenance fee, which eats up anything I put in there. One some of these creeps go to jail, it should stop this abuse. Unfortunately, nobody dares touch. They are like a money-Mafia.

mary
June 27, 2011 at 1:57 pm

BOA is very deceitful i have my mortgage with them and had to report them to the banking industry for what i thought was unethical practices. they were supposedly assisting me with a loan modification which took maybe a year before it was finalized and in the interim my mortgage went up $400.00. I almost killed myself trying to maintain, it was an absolute horrible experience for me and i believe it was all intentional. One department had no idea as to what the other department was doing and they didnt seem to care at all. according to them my paperwork was never complete and i had to continuosly sent in the same items. i am appauled at what they were allowed to get away with and donot recommend them to anyone.

Bill
June 27, 2011 at 1:48 pm

I won't bore the readers with all the details but essentially got into an interest-only loan from Countrywide which of course was absorbed by BoA. Then the crash - salary cuts and ultimately laid-off. Came to the point of getting forclosure threats from BoA. We did everything we could to maintain the mortgage at the expense of everything else. Credit rating is now in the toilet, more overall debt due to late fees, etc.
Then came the MHA program. Saw that as a possible savior. Talked to BoA, and started the paperwork process. Sent the required docs month after month after month using every mailing method possible - NO acknowledgement of reciept, just more threat notices. After about 18 months of this and the associated stress, BoA finally offered us a very low interest loan. Not a true modification mind you. Fortunately over that time, our financial position began recover and look brighter to the point where we could marginally afford the loan. That's to say fewer other creditors were impacted by the cash position.
This loan will increase up to $800 more per month as the int. rate ticks up over the next 5yrs. We're at a recovered point now where we could afford that as well as start tackling the other debt. At the same time, we're significantly underwater. It's not likely the market will recover to the point of breaking even and in 5yrs I'll be 67yrs old. The only hope is to break even and at least maintain my recovered income level.
I fully expect to end up selling, hopefully not a short-sale with in the 5yrs. The bottom line - lucky to sustain but certainly not saved. The rest of our lives will be as a renter, sad after being in this home for 20yrs and nothing to show for it. I have to say, better than foreclosure but only because good luck helped avert it.

Diane
June 27, 2011 at 1:40 pm

Wachovia now Wells Fargo said sure we can help, fill out all this paperwork and we can get you set up for a loan modification. Sure they can, first they insisted they never received even though I have fax confirmations, resent, next it was I omitted necessary paperwork, then it was we never received again, back to omitting info. I gave up got an apartment and they are now the proud owner of a foreclosed property.

james
June 27, 2011 at 1:39 pm

I was put into a predatory Neg am pay option loan>i paid the minimum and 500.00 extra to the principal>the bank told me the mimimum was not enough to cover my interest and would not honor the loan they had given me. my principal has grown over 18000.oo dollars in the past 5 years.Aurora denied me a modification after 18 months of paperwork and headaches.Said i didnt fill out a 4506 out correctly.What a hoaks

mike bohenek
June 27, 2011 at 1:22 pm

Bank Of America; Very difficult to deal with ... try a small local bank, if possible, when obtaining a loan.