Bank of America is facing a blizzard of lawsuits because of its foreclosure policies. One of these is a class action lawsuit claiming that B of A refused to participate in various foreclosure prevention programs even though they had agreed to do so when they took federal money. Similar claims were also filed by the Attorney Generals of both Nevada and Arizona.
Do you remember the TARP program, where the government set out to “jump-start” the economy?
Well, one of the recipients of TARP fund was Bank of America. They received $25 billion of US taxpayer money. Yeah, I know the government claims it was their money but let’s not quibble. As a condition to getting these 25 big ones, Bank of America signed a contract with the U.S. Treasury on April 17, 2009 agreeing to comply with the Home Affordable Modification Program (HAMP) to perform loan modifications and other foreclosure prevention services.
But, B of A has apparently resisted and avoided the actual participation in the HAMP program. And the avoidance was, again, apparently to the degree that B of A is now facing several class action lawsuits claiming that B of A reneged on the deal and that the taxpayers and the losing home owners both suffered.
Now apparently, the servicers of these mortgages get paid $1000 each HAMP loan modification. But, they make a whole lot more by simply continuing to “service” the loan. So, why would they even remotely consider loan modifications?
Read more here.