Bank of America Accused of Hindering Federal Foreclosure Review
June 18th, 2011
According to the Federal Housing Administration (FHA), Bank of America did everything possible – from dragging its feet on providing information to deliberately leaving out facts and denying access to employees – to interfere with a federal review of its foreclosure processes and history[1]. “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,” assistant regional inspector general for the FHA William Nixon testified during a hearing in early June. The hearing became public when the state of Arizona obtained the filing last week for use in its own case against BofA, a part of which involves interviewing former BofA employees to prove or disprove suspicions that the lender mislead homeowners seeking mortgage modifications.
Not surprisingly, BofA spokesman Dan Frahm insists that the lender not only cooperated with the U.S. inquiry, but that “any suggestion otherwise is both inaccurate and inconsistent with how we work with all regulators”[2]. However, Nixon says that when interviews with employees were granted, “the presence or involvement of the bank’s attorneys limited the effectiveness of the interviews.” He added that many times the attorneys would simply refuse to allow employees to answer questions and that information provided in response to two subpoenas was incomplete. Nixon also blamed the bank’s delay in providing information for the poor review the lender ultimately received of its processes and controls.
Nixon says that the review was “impaired” because his team was unable to fully measure the impact of BofA’s foreclosure practices. Despite the news, BofA stock rose 17 cents yesterday.
Do you think that Bank of America should still be in business? Can or should they be shut down? Was it reasonable to send attorneys in with the employees for their interviews?
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[1] http://seattletimes.nwsource.com/html/realestate/2015341930_realbofa19.html
[2] http://www.bloomberg.com/news/2011-06-13/bofa-significantly-hindered-foreclosure-review-of-its-loans-u-s-says.html
June 18th, 2011 at 1:02 PM
BoA is only the tip of the iceberg - if you want to see who the REAL hardened criminals are - just take a look at IndyMac Bank (a.k.a OneWest).
This is the cesspool of fraud that should be investigated. IndyMac’s business practices make Enron’s activities look like misdemeanors by comparison.
June 18th, 2011 at 3:13 PM
BofA is holding out on foreclosures trying to control the declining market…buyers will just sit and wait while we continue to watch the housing market decline.