Lawsuit: BofA paid bonuses for foreclosures
Six former Bank of America (BofA) employees have accused the bank of intentionally driving homeowners into foreclosure, and then rewarding workers who did so with cash bonuses and gift cards.
June 17, 2013 at 08:56 AM
6 minute read
The original version of this story was published on Law.com
Six former Bank of America (BofA) employees have accused the bank of intentionally driving homeowners into foreclosure, and then rewarding workers who did so with cash bonuses and gift cards.
The allegations emerged in court papers filed as part of a class action suit from BofA borrowers in 26 states. According to the ex-employees, BofA instructed them workers to stall loan assistance applications and lie to eligible homeowners about the status of their mortgage payments in an effort to disqualify them from the government-run Home Affordable Modification Program (HAMP).
These tactics reportedly resulted in homeowners being forced into foreclosure on in-house loan modifications, both of which make BofA more money than the federal program. The bank allegedly rewarded employees who put 10 or more accounts into foreclosure in a month with a $500 bonus, while punishing those who failed to meet their foreclosure quotas.
“We were regularly drilled that it was our job to maximize fees for the bank by fostering and extending delay of the HAMP modification process by any means we could,” Simone Gordon, a former loss mitigation specialist at the bank, said in a statement, according to the Charlotte Observer.
The bank, meanwhile, adamantly denies its ex-employees' allegations. “We continue to demonstrate our commitment to assisting customers who are at risk of foreclosure and, at best, these attorneys are painting a false picture of the bank's practices and the dedication of our employees,” BofA spokesman Rick Simon said in a statement. “While we will address the declarations in more depth when we file our opposition to plaintiffs' motion next month, suffice it is to say that each of the declarations is rife with factual inaccuracies.”
For more InsideCounsel coverage of the mortgage crisis, see:
NY AG sues HSBC for violating foreclosure laws
Bank of America mortgage deal goes before judge
MBIA settles with Bank of America over allegedly defective mortgages
NY AG plans to sue Bank of America, Wells Fargo
Fraud allegations cannot reopen voluntarily dismissed foreclosure cases
Six former
The allegations emerged in court papers filed as part of a class action suit from BofA borrowers in 26 states. According to the ex-employees, BofA instructed them workers to stall loan assistance applications and lie to eligible homeowners about the status of their mortgage payments in an effort to disqualify them from the government-run Home Affordable Modification Program (HAMP).
These tactics reportedly resulted in homeowners being forced into foreclosure on in-house loan modifications, both of which make BofA more money than the federal program. The bank allegedly rewarded employees who put 10 or more accounts into foreclosure in a month with a $500 bonus, while punishing those who failed to meet their foreclosure quotas.
“We were regularly drilled that it was our job to maximize fees for the bank by fostering and extending delay of the HAMP modification process by any means we could,” Simone Gordon, a former loss mitigation specialist at the bank, said in a statement, according to the Charlotte Observer.
The bank, meanwhile, adamantly denies its ex-employees' allegations. “We continue to demonstrate our commitment to assisting customers who are at risk of foreclosure and, at best, these attorneys are painting a false picture of the bank's practices and the dedication of our employees,” BofA spokesman Rick Simon said in a statement. “While we will address the declarations in more depth when we file our opposition to plaintiffs' motion next month, suffice it is to say that each of the declarations is rife with factual inaccuracies.”
For more InsideCounsel coverage of the mortgage crisis, see:
NY AG sues
NY AG plans to sue
Fraud allegations cannot reopen voluntarily dismissed foreclosure cases
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All
Trending Stories
- 1Crypto Hacker’s $65 Million Scam Ends in Indictment
- 2Trump's Inspectors General Purge Could Make Policy Changes Easier, Observers Say
- 3Supporting Our Supreme Court Justices in the Guardianship Part
- 4'Erroneous Rulings'?: Wilmer Asks 4th Circuit to Overturn Mosby's Criminal Convictions
- 5Judge Orders Acquittal of Ex-Prosecutor on 1 of 2 Counts in Misconduct Trial Over Ahmaud Arbery Case
Who Got The Work
J. Brugh Lower of Gibbons has entered an appearance for industrial equipment supplier Devco Corporation in a pending trademark infringement lawsuit. The suit, accusing the defendant of selling knock-off Graco products, was filed Dec. 18 in New Jersey District Court by Rivkin Radler on behalf of Graco Inc. and Graco Minnesota. The case, assigned to U.S. District Judge Zahid N. Quraishi, is 3:24-cv-11294, Graco Inc. et al v. Devco Corporation.
Who Got The Work
Rebecca Maller-Stein and Kent A. Yalowitz of Arnold & Porter Kaye Scholer have entered their appearances for Hanaco Venture Capital and its executives, Lior Prosor and David Frankel, in a pending securities lawsuit. The action, filed on Dec. 24 in New York Southern District Court by Zell, Aron & Co. on behalf of Goldeneye Advisors, accuses the defendants of negligently and fraudulently managing the plaintiff's $1 million investment. The case, assigned to U.S. District Judge Vernon S. Broderick, is 1:24-cv-09918, Goldeneye Advisors, LLC v. Hanaco Venture Capital, Ltd. et al.
Who Got The Work
Attorneys from A&O Shearman has stepped in as defense counsel for Toronto-Dominion Bank and other defendants in a pending securities class action. The suit, filed Dec. 11 in New York Southern District Court by Bleichmar Fonti & Auld, accuses the defendants of concealing the bank's 'pervasive' deficiencies in regards to its compliance with the Bank Secrecy Act and the quality of its anti-money laundering controls. The case, assigned to U.S. District Judge Arun Subramanian, is 1:24-cv-09445, Gonzalez v. The Toronto-Dominion Bank et al.
Who Got The Work
Crown Castle International, a Pennsylvania company providing shared communications infrastructure, has turned to Luke D. Wolf of Gordon Rees Scully Mansukhani to fend off a pending breach-of-contract lawsuit. The court action, filed Nov. 25 in Michigan Eastern District Court by Hooper Hathaway PC on behalf of The Town Residences LLC, accuses Crown Castle of failing to transfer approximately $30,000 in utility payments from T-Mobile in breach of a roof-top lease and assignment agreement. The case, assigned to U.S. District Judge Susan K. Declercq, is 2:24-cv-13131, The Town Residences LLC v. T-Mobile US, Inc. et al.
Who Got The Work
Wilfred P. Coronato and Daniel M. Schwartz of McCarter & English have stepped in as defense counsel to Electrolux Home Products Inc. in a pending product liability lawsuit. The court action, filed Nov. 26 in New York Eastern District Court by Poulos Lopiccolo PC and Nagel Rice LLP on behalf of David Stern, alleges that the defendant's refrigerators’ drawers and shelving repeatedly break and fall apart within months after purchase. The case, assigned to U.S. District Judge Joan M. Azrack, is 2:24-cv-08204, Stern v. Electrolux Home Products, Inc.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250
