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HUD says BofA ‘hindered’ probe

By Jay MacDonald ·
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.

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July 18, 2011 at 7:48 am

Too bad for BofA. I am a short-sale buyer. BA stalled the short sale offer SOOOO bad that it took 5 months just to get a offer approved. This approval DID NOT occur until I contacted STATE STREET CORP-BOSTON BofA largest shareholder) and advised them how BofA was loosing money (talked with the CEO). Then the property was approved. BofA just wants to keep delinquent homeowners on the hook as long as posssible due to the profitable late fees and the such charges for being delinquent. I won't do business as a customer to BofA again,homeowners are advised to let the foreclosure happen or BofA will suck you dry financially.

Cable Mail
July 17, 2011 at 11:26 pm

You all worry me. I have mortgage also with BofA. So far I'm good and haven't been late in over two years. I have 27.5 years to go. I keep praying and thanking the Good Lord that I still have a job but the work and projects have come to such a slow pace next to stop that it worries me I could lose the job. It sounds as though BofA are really "dogs" to deal with. I hope someone has some good points to help someone down the road like myself that could soon be in the same boat. Thanks all.

July 17, 2011 at 8:05 pm

Hopefully, when it is all done and over, BOA will go bankrupt. They have had plenty of chances to work with people but are not bright enough to do it. So, how is it to their advantage to give away houses instead of working with people who might actually work with them to pay??? Before I heard about the Deed In Lieu, I tried to work on a one would ever return a call...but every voicemail at the company says they will return call within 48 hr HAHAHA. Maybe 48 days if you are lucky... For those of you who don't know about Deed In Lieu, try to get it. If you give deed back to bank, govt pays you $3000. I told friends about that and they got it taken care of within 2 weeks. The bank that had my dad's house actually called and offered it to him. BOA thinks that is their money and they are thieves...I gave up on that and now they are not doing anything. I just want them to foreclose, deed in lieu, anything no matter what part of their body they have to stick it. I never even asked them for a loan, they bought my loan from another bank and when they did, no one told me and my payments came back twice. When I found out they were taking over I called to find out how to pay them and they would not even agree to waive the late fee because I did not know they owned my house. Of course, that $35 was very important to their sorry asses. I hope they go under bad. By the way, I also hope everyone saw the UTube where they tried to foreclose on a house that they never owned. The guy actually foreclosed on them and had the law go to the local office and take furniture, etc. Small to BOA but maybe if we could all fight back, they might figure it out.

July 17, 2011 at 7:52 pm

I have tried to work with BOA for over 2 yr. They are crooks as far as I am concerned. I tried to do the Deed In Lieu. First, they told me they never heard of it. I told them how to learn about it, then they would never return any of my calls. I called HUD, then BOA started returning my calls. They said I had to have someone living in it and be in foreclosure before they would consider it. Then they said they would not do it because someone was living there. The saddest part is that the way it works for the Deed in Lieu is government money and they act like it is their money. I finally told them in March that they could just take it any way they want. Now, the place started foreclosure over a year ago and I got notices a couple times until I told them to take it, now I have not heard anything for 4 months. They are the biggest thieves in America and the government has given them breaks just like the auto companies, but they just don't get it and think they can continue to scam everyone. I do not care which part of anyone's body they put it but wish they would get it over with. I will continue to the "word of mouth" that tells everyone to NEVER deal with that "so called" bank. I would rather deal with a loan shark. At least I would know I am getting screwed illegally instead of BOA doing it "so called" legally.

July 17, 2011 at 5:56 pm

i have been trying to work a short sale witt BOA for 3 years now. my loan was 162K we have had several offers of 100k and above and all have been turned down. we gave up on it and walked. now BOA can stick the house up there ASS i tried to work with them but they want all the money owed.. GUESS WHAT i been unemployed for 3 years now so get in line BOA your at the bottom of my pile .....

July 17, 2011 at 3:20 pm

The situation is out of hand. Boa is making all the money in the world and homeowners are being tossed out at alarming rates. 3 years of this and we are ready to walk away too.Then the banks are going to give your homes away? Why not help the people whoown them in the first place. Rich get Richer Poor get poorer. Somethingis wrong with this system. It's about time someone stands up and fights these Giants! Go down BOA!!!!

John Boy
July 13, 2011 at 6:33 pm

Tried to request loan modification for my "Jumbo" loan.
How is 225K a JUMBO?
BOA took two months to respond with a proposal.
Had to hassle them to get a response.
They wanted me to come to the table with $8,000 in closing costs to pay $200 per month less. Would have left me backwards on my home if I'm already not.
They don't care.
PS BOA - if I had 8K I wouldn't need a loan modification.
Why are they not accountable?
Follow the money

July 11, 2011 at 8:48 pm

The Banks wonder why people walk away from their homes....

July 06, 2011 at 4:06 pm

We've been trying to modify with B of A for 2 years now. We have been given the same run-around everyone else here has. Two weeks ago we received a congratulations email saying we have finally been accepted for a mod. It gave a payment amount (which we were happy with) and the first payment date. A few days later we received a letter thanking us for applying for a modification and that they will review our case. Yesterday we received a denial letter, saying the invester is declining the mod. Does this type of run-around sound familiar? We have a great income, it's just that we had to file a bk three years ago and lost a very large amount of money. That caused us to get behind on payments. It makes me so angry that B of A has drug their feet for two years and now is denying us a mod. We have the money to pay for our home, but can't make up the amount we are delinquent (we've offered to simply have them tack it onto the end of the loan, but they refuse). I'm sure they'll foreclose and our home will sit vacant and deteriorate, bringing down the value of our neighborhood. By the way, I learned that the TARP program also pays banks each month for every loan they say is in review. This explains why they allow things to go on for years. With that and then the $ they get from TARP when they foreclose, and then the $ they get when they sell the propery, the banks are making a killing. What crooks!

July 04, 2011 at 1:30 pm

finally got a mod from b/a took 18 months of hell, lost paper work ect you have herd the stories, they were to deduct the payment 7/1/11 guess what never happened.maybe i should just say uncle an let it go.