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Forum Post: 6 Unbelievable Ways the Big Banks Are Scamming You

Posted 5 years ago on June 20, 2013, 5:02 p.m. EST by BradB (2693) from Washington, DC
This content is user submitted and not an official statement

June 19, 2013 |
It is going on five years since the financial crash and three years since President Obama signed the meager Dodd–Frank Wall Street Reform and Consumer Protection Act, and the big banks are still scamming and conning and ripping off their customers. What a huge surprise.

After the financial crash, we heard about a laundry list of abuses and frauds that ranged from small things, like hidden fees, to pushing minorities into subprime loans and then switching them into more expensive mortgages at signing time, to huge things like selling trillions of dollars in complicated CDO schemes and making bets on derivatives of derivatives without having the reserves to pay off what they owed when the bets went bad.

Of course, no one at the top was prosecuted and the banks were allowed to settle a host of charges (which meant that their shareholders, not the executives who made the decisions, paid the fines). The bad behavior gave these giants a competitive advantage, driving out what good companies there were. So the costly and destructive bad behavior, schemes, cons and scams continue.

  1. Falsifying Paperwork, Blitzing, Lying About Payments to Force Homeowners Into Foreclosure....

  2. Bank Protection “Service” Puts Consumers at “Greater Risk Of Harm”....

  3. Transaction Ordering....

  4. Forced Arbitration....

  5. Marketing Refinancing That Costs People....

  6. Banks Trying To Kill the CFPB.....

details; http://www.alternet.org/corporate-accountability-and-workplace/bank-scam



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[-] 5 points by shadz66 (19985) 5 years ago

"Checks, Lies and Bankster Red Tape", by Thom Hartmann :

''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.''

radix omnium malorum est cupiditas ...

[-] 4 points by LeoYo (5909) 5 years ago

Bank of America Lied to Homeowners and Rewarded Foreclosures, Former Employees Say

Friday, 21 June 2013 09:22 By Paul Kiel, ProPublica | Report


Bank of America employees regularly lied to homeowners seeking loan modifications, denied their applications for made-up reasons, and were rewarded for sending homeowners to foreclosure, according to sworn statements by former bank employees.

The employee statements were filed late last week in federal court in Boston as part of a multi-state class action suit brought on behalf of homeowners who sought to avoid foreclosure through the government’s Home Affordable Modification Program (HAMP) but say they had their cases botched by Bank of America.

In a statement, a Bank of America spokesman said that each of the former employees’ statements is “rife with factual inaccuracies” and that the bank will respond more fully in court next month. He said that Bank of America had modified more loans than any other bank and continues to “demonstrate our commitment to assisting customers who are at risk of foreclosure.”

Six of the former employees worked for the bank, while one worked for a contractor. They range from former managers to front-line employees, and all dealt with homeowners seeking to avoid foreclosure through the government’s program.

When the Obama administration launched HAMP in 2009, Bank of America was by far the largest mortgage servicer in the program. It had twice as many loans eligible as the next largest bank. The former employees say that, in response to this crush of struggling homeowners, the bank often misled them and denied applications for bogus reasons.

Sometimes, homeowners were simply denied en masse in a procedure called a “blitz,” said William Wilson, Jr., who worked as an underwriter and manager from 2010 until 2012. As part of the modification applications, homeowners were required to send in documents with their financial information. About twice a month, Wilson said, the bank ordered that all files with documentation 60 or more days old simply be denied. “During a blitz, a single team would decline between 600 and 1,500 modification files at a time,” he said in the sworn declaration. To justify the denials, employees produced fictitious reasons, for instance saying the homeowner had not sent in the required documents, when in actuality, they had.

Such mass denials may have occurred at other mortgage servicers. Chris Wyatt, a former employee of Goldman Sachs subsidiary Litton Loan Servicing, told ProPublica in 2012 that the company periodically conducted “denial sweeps” to reduce the backlog of homeowners. A spokesman for Goldman Sachs said at the time that the company disagreed with Wyatt's account but offered no specifics. Five of the former Bank of America employees stated that they were encouraged to mislead customers. “We were told to lie to customers and claim that Bank of America had not received documents it had requested,” said Simone Gordon, who worked at the bank from 2007 until early 2012 as a senior collector. “We were told that admitting that the Bank received documents ‘would open a can of worms,’” she said, since the bank was required to underwrite applications within 30 days of receiving documents and didn’t have adequate staff. Wilson said each underwriter commonly had 400 outstanding applications awaiting review.

Anxious homeowners calling in for an update on their application were frequently told that their applications were “under review” when, in fact, nothing had been done in months, or the application had already been denied, four former employees said.

Employees were rewarded for denying applications and referring customers to foreclosure, according to the statements. Gordon said collectors “who placed ten or more accounts into foreclosure in a given month received a $500 bonus.” Other rewards included gift cards to retail stores or restaurants, said Gordon and Theresa Terrelonge, who worked as a collector from 2009 until 2010. This is certainly not the first time the bank has faced such allegations. In 2010, Arizona and Nevada sued Bank of America for mishandling modification applications. Last year, Bank of America settled a lawsuit brought by a former employee of a bank contractor who accused the bank of mishandling HAMP applications. The bank has also settled two major actions by the federal government related to its foreclosure practices. In early 2012, 49 state attorneys general and the federal government crafted a settlement that, among other things, provided cash payments to Bank of America borrowers who had lost their home to foreclosure. Authorities recently began mailing out those checks of about $1,480 for each homeowner. Earlier this year, federal bank regulators arrived at a settlement that also resulted in payments to affected borrowers, though most received $500 or less.

The law suit with the explosive new declarations from former employees is a consolidation of 29 separate suits against the bank from across the country and is seeking class action certification. It covers homeowners who received a trial modification, made all of their required payments, but who did not get a timely answer from the bank on whether they’d receive a permanent modification. Under HAMP, the trial period was supposed to last three months, but frequently dragged on for much longer, particularly during the height of the foreclosure crisis in 2009 and 2010.

ProPublica began detailing the failures of HAMP from the start of the program in 2009. HAMP turned out to be a perfect storm created by banks that refused to adequately fund their mortgage servicing operations and lax government oversight.

Bank of America was far slower to modify loans than other servicers, as other analyses we've cited have shown. A study last year found that about 800,000 homeowners would have qualified for HAMP if Bank of America and the other largest servicers had done an adequate job of handling homeowner applications.

Statements by the Bank of America Employees

•William Wilson, Jr.

•Simone Gordon

•Theresa Terrelonge

•Steven Cupples

•Recorda Simon

•Erika Brown

Statement by Bank of America Contractor: Bert Sheeks


• The State of HAMP - See the performance of all the mortgage servicers.

•Making Home Affordable.gov - The administration’s web site for the foreclosure prevention program. Provides an FAQ, homeowner examples, and other tools to see whether you might qualify for the program.

•Foreclosure Avoidance Counselors - A list of HUD-approved housing counseling agencies nationwide.

•FTC Tips for Mortgage Servicing Consumers - Tips for homeowners from the Federal Trade Commission.

•Program Guidelines for Mortgage Servicers - These rules lay out how mortgage servicers are supposed to conduct the program.

•Calculated Risk - A finance and economics blog that provides news and metrics on the state of the housing market.

This article was first published on Truthout and any reprint or reproduction on any other website must acknowledge Truthout as the original site of publication.

[-] 1 points by DebtSUSPENSIONRights (181) 5 years ago

You don't necessarily cut and paste the entire article, that is considered stealing. However, I do recommend people go to the article and read the over 120 comments from angry homeowners who have all been bilked.

[-] 2 points by DebtSUSPENSIONRights (181) 5 years ago

I shared this article on my www.credit-protector.blogspot.com blog. That's why there is a "1" above the orange share icon to the left.

[-] 2 points by Whiterose (6) 5 years ago

Chomsky was just talking about this, how the elite bankers and brokers are not prosecuted for their infinitely more destructive malfeasance and the little guys are losing their shirts. On top of that you have the GOP telling the poor it's their fault and getting them to vote against their own interests. But, Obama is no bastion of integrity either. I'm completely shocked about the way he's governing. Just another "good ol boy" really. If it wasn't so sad it would be funny!

[-] 1 points by bensdad (8977) 5 years ago

As long as we let the corporatists buy our democracy with contributions & lobbying - we 99% are screwed
We must elect progressives like Bernie & Elizabeth & Alan Grayson who proved that they support the 99%