BofA Told Employees to Lie
Bank of America Employees Told to Lie
Bank of America (BAC) is firing back at former employees who filed declarations
in a federal court last week, claiming the mortgage lender told them to lie to
customers seeking loan modifications. In a statement BofA essentially called
them liars, “Each of the declarations is rife with factual inaccuracies.” This
will make for interesting courtroom drama where he said she said and everyone
will be calling everyone, a liar. Former employees said they got bonuses for
denying as many loan modifications as possible and for putting homes into
foreclosure. Reportedly, BofA rewarded those employees with gift cards to Target
and Bed Bath and Beyond. In an attack on the credibility of lawyers painting
these pictures, BofA said “These attorneys are painting a false picture of the
Ever since the Obama administration started the Home Affordable Modification
Program (HAMP) in 2009, its been said that some people who applied for a loan
modifications with BofA heard the response that the bank inexplicably lost their
paperwork resulting in homes foreclosed. Former BofA employees allege the bank
had the paperwork all along, saying it was part of a scheme by BofA to deny loan
modifications and to steer financially troubled customers into more expensive
submitted under penalty of perjury from former BofA employees:
Erika Brown, who worked at Bank of America from June 2009 through June 2010
said, “I saw records regarding hundreds of homeowners that Bank of America
treated dishonestly. The homeowners were eligible for loan modifications under
HAMP, sent back all the required documents, and made all their required
payments. Bank of America nevertheless damaged their credit ratings by reporting
them delinquent, tacked on additional charges to their loans, increased the
amounts it considered as being owed and often referred these homeowners to
Recorda Simon, who worked at Bank of America’s call center in Fort Worth, Texas,
from August 2010 to January 2011, “Although I was called a “Home Retention
Specialist,” my job was to collect as much money as possible from homeowners.”
Simone Gordon, who worked at Bank of America from July 2007 to February 2012
said, "We were told to lie to customers and claim that Bank of America had not
received documents it had requested, and that it had not received trial
payments” when in fact it had. A collector who placed 10 or more accounts into
foreclosure in a given month received a $500 bonus. Bank of America also gave
employees gift cards to retail stores as rewards for placing accounts into
Steven Cupples, an underwriter who worked at Bank of America until 2012 said,
“The numbers Bank of America were reporting to the government and to the public
were simply not true. Employees who challenged … the ethics of Bank of America’s
practice for any reason were fired.”
Theresa Terralonge, who worked for Bank of America from June 2009 to June 2010
said, “Bank of America was trying to prevent as many homeowners as possible from
obtaining permanent HAMP loan modifications, while leading the public and the
government to believe that it was making efforts to comply with HAMP.”
William E. Wilson Jr., a team manager for Bank of America from June 2010 through
August 2012, in Charlotte, N.C. said, “I told my supervisors these practices
were ridiculous and immoral. We were instructed to delay and then push
homeowners to accept an internal refinance so that Bank of America would profit.
Once an applicant was finally rejected after a long delay, the bank would offer
them an in-house alternative. Bank of America would charge a higher interest
rate, ranging up to 5%, as compared to 2% if the loan had been modified under
FedEx Corp. (FDX) reported Q4 revenue of $11.4 billion, profit fell to $303
million or 95 cents a share and earnings adjusted for business realignment and
aircraft impairment charge were $679 million or $2.13 a share. FedEx Chief
Executive Frederick W. Smith commended Q4 results but said it did not offset the
headwinds of slow economic growth and consumer appetite for cheaper shipping
Obama to Bernanke: Time is Up
Early this week, President Barack Obama made a remark that Federal Reserve
Chairman Ben Bernanke stayed longer than he was suppose to. The comment was
taken by Former Federal Reserve Governor Laurence Meyer from 1996 through 2002
that, "He essentially fired Ben Bernanke on the spot and gave him a fairly tepid
testimonial afterward. It's time to really now focus on who the next chairman
might be." Meyer added that his remarks were a bit hyperbolic and said, "the
president said he stayed longer than he wanted to and was supposed to. What does
that mean? I'm just befuddled."
Federal Open Market Committee statement
Information received since the Federal Open Market Committee met in May suggests
that economic activity has been expanding at a moderate pace. Labor market
conditions have shown further improvement in recent months, on balance, but the
unemployment rate remains elevated. Household spending and business fixed
investment advanced, and the housing sector has strengthened further, but fiscal
policy is restraining economic growth. Partly reflecting transitory influences,
inflation has been running below the Committee’s longer-run objective, but
longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum
employment and price stability. The Committee expects that, with appropriate
policy accommodation, economic growth will proceed at a moderate pace and the
unemployment rate will gradually decline toward levels the Committee judges
consistent with its dual mandate. The Committee sees the downside risks to the
outlook for the economy and the labor market as having diminished since the
fall. The Committee also anticipates that inflation over the medium term likely
will run at or below its 2 percent objective.
To support a stronger economic recovery and to help ensure that inflation, over
time, is at the rate most consistent with its dual mandate, the Committee
decided to continue purchasing additional agency mortgage-backed securities at a
pace of $40 billion per month and longer-term Treasury securities at a pace of
$45 billion per month. The Committee is maintaining its existing policy of
reinvesting principal payments from its holdings of agency debt and agency
mortgage-backed securities in agency mortgage-backed securities and of rolling
over maturing Treasury securities at auction. Taken together, these actions
should maintain downward pressure on longer-term interest rates, support
mortgage markets, and help to make broader financial conditions more
The Committee will closely monitor incoming information on economic and
financial developments in coming months. The Committee will continue its
purchases of Treasury and agency mortgage-backed securities, and employ its
other policy tools as appropriate, until the outlook for the labor market has
improved substantially in a context of price stability. The Committee is
prepared to increase or reduce the pace of its purchases to maintain appropriate
policy accommodation as the outlook for the labor market or inflation changes.
In determining the size, pace, and composition of its asset purchases, the
Committee will continue to take appropriate account of the likely efficacy and
costs of such purchases as well as the extent of progress toward its economic
To support continued progress toward maximum employment and price stability, the
Committee expects that a highly accommodative stance of monetary policy will
remain appropriate for a considerable time after the asset purchase program ends
and the economic recovery strengthens. In particular, the Committee decided to
keep the target range for the federal funds rate at 0 to 1/4 percent and
currently anticipates that this exceptionally low range for the federal funds
rate will be appropriate at least as long as the unemployment rate remains above
6-1/2 percent, inflation between one and two years ahead is projected to be no
more than a half percentage point above the Committee’s 2 percent longer-run
goal, and longer-term inflation expectations continue to be well anchored. In
determining how long to maintain a highly accommodative stance of monetary
policy, the Committee will also consider other information, including additional
measures of labor market conditions, indicators of inflation pressures and
inflation expectations, and readings on financial developments. When the
Committee decides to begin to remove policy accommodation, it will take a
balanced approach consistent with its longer-run goals of maximum employment and
inflation of 2 percent.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman;
William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Jerome H.
Powell; Sarah Bloom Raskin; Eric S. Rosengren; Jeremy C. Stein; Daniel K.
Tarullo; and Janet L. Yellen. Voting against the action was James Bullard, who
believed that the Committee should signal more strongly its willingness to
defend its inflation goal in light of recent low inflation readings, and Esther
L. George, who was concerned that the continued high level of monetary
accommodation increased the risks of future economic and financial imbalances
and, over time, could cause an increase in long-term inflation expectations.
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June 19, 2013