Created Jun 16, 2013
America’s foreclosure crisis may go down as the greatest scam in history. Last week in a Boston federal court, Bank of America employees admitted that they regularly lied to struggling homeowners in return for higher default fees for the bank and pay bonuses for themselves.
ProPublica reports that “former Bank of America employees stated that they were encouraged to mislead customers” by telling them documents were not received and other delay tactics, so they could assure foreclosures laden with money-making bank fees and penalties.
“Employees were rewarded for denying applications and referring customers to foreclosure,” according to the report.
If a Bank of America employee forced at least 10 homeowners into foreclosure in a single month, they were paid a $500 bonus.
The employee statements were provided to the court as part of a consolidated class action suit that involved 29 lawsuits from across the country.
Other lenders allegedly indulged in similar practices, including Goldman Sachs, which, like Bank of America, used “denial sweeps” (a means of denying multiple loans at a time) to send homeowners hoping to save their homes through loan modifications into foreclosure.
Despite mounting evidence that banks used both unethical and illegal measures to foreclose homes, none have faced federal criminal charges.
Freshman Sen. Elizabeth Warren (D-Mass.) has been leading the charge against too-big-to-jail banks from her seat on the Senate Banking Committee.
Warren sent a letter to Attorney General Eric Holder Tuesday, demanding that the United States government criminally prosecute bankers that illegally foreclosed on homes.
“If large financial institutions can break the law and accumulate millions in profits and, if they get caught, settle by paying out of those profits, they do not have much incentive to follow the law,” Warren’s letter said, in part.
When the financial markets collapsed in 2008 under the pressure of what has since been attributed to mortgage securities fraud by Wall Street investors, the US government bailed out the industry with at least $16 trillion in taxpayer money.
The deal has turned out to be a boon for the bankers, who used the cash infusion to pay CEO’s multi-million dollar bonuses and boost their profits, but did little to save millions of homeowners from foreclosures and personal financial disasters.
If ever there were an icon of all that is wrong with the corporate takeover of the US government and political system, this is it.
There are two sets of rules in America today. One for those who control the most wealth, and one for the people who can’t afford to fight off their corrupting influence.
Author’s note: This report includes opinions and commentary based on independent analysis of official documents and public information.