Contact 13 investigates Bank of America
Updated: May 10, 2010 11:33 PM PDT
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Contact 13 investigates Bank of America
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Las Vegas, NV (KTNV) – Nearly 100 angry homeowners took to the streets Monday, protesting what they call unfair treatment by Bank of America, the nation’s biggest bank.
They marched from a local law office to the federal courthouse, to show the judge that they mean business. Nevada leads the nation in foreclosures and Bank of America holds more of our mortgages than any other lender.
Action News regularly field phone calls and emails from frustrated customers who call Bank of America despicable when it comes to loan modifications and foreclosures.
The customer service they describe as slow, lazy and downright incompetent.
As Contact 13 Chief Investigator Darcy Spears discovered, it’s eaten up billions in bailout money, but many homeowners have nothing to show for it.
They sum up their feelings in few words:
“Betrayed.”
“Shame on you.”
“Broken. What do I tell my kids?”
“No integrity.”
“Horrendous.”
“Frustrated.”
“Screwed.”
“No mercy.”
Those are the words of average Nevada homeowners facing foreclosure. They’re so fed up, they’ve filed a class action lawsuit against Bank of America.
They call their lender’s conduct fraudulent, malicious and egregiously in bad faith.
“Pretty much at my breaking point,” said a man who has had his checks returned when he’s tried to send partial mortgage payments.
“Shame on you, Bank of America,” scolded another of the class action plaintiffs.
“Bank of America… un-American,” says a local veteran.
“By a show of hands,” we asked the lawsuit participants, “how many of you feel like you’ve done everything they’ve asked of you and they’ve turned a blind eye and a deaf ear to your plight?”
Every hand in the room of 32 people shot up. Buying Countrywide gave Bank of America the most mortgages in the United States.
But lawmakers and Bank of America homeowners say they’re getting the least amount of help.
“Of all the calls we get, the most complaints are about Bank of America,” says Representative Dina Titus (D), Nevada.
Bank of America pocketed $45 billion in taxpayer bailout money. Though they paid the government back, there’s been little payback for hurting homeowners in Las Vegas, ground zero for foreclosures.
“All I want to do is save my home,” says Robert Blackford, a disabled Desert Storm veteran and single father.
He says Bank of America told him there was hope on the horizon with a new program that could help him save his home, but he’d have to wait until the end of May.
“Pretty much everything’s on hold until then. That’s what the operator said.”
But it wasn’t on hold for him because in April they filed a notice of default and intent to sell, telling him they’re going to sell his house out from under him.
Contact 13 discovered there may be more profit for banks to foreclose instead of helping people stay in their homes.
If Bank of America modifies a loan, they lose money. If they allow a short sale, they stop earning money on the loan.
But on a foreclosure, they profit every step of the way. If you get a foreclosure letter like the one Robert Blackford found taped to his door, it says it’s from a company called ReconTrust in Texas.
But ReconTrust is owned by Bank of America.
They get paid to foreclose, to dispose of the property, and, like many other banks, they require everyone making an offer on a foreclosed home to pre-qualify with one of their lenders.
Representative Dina Titus calls it a “super-monopoly.”
“The bank’s looking after its own bottom line because it controls every step of the process,” Representative Titus explained.
A recent review of the federal “Making Home Affordable” program shows 73% of Bank of America homeowners are not getting the help for which they qualify.
At a recent hearing on Capitol Hill, Bank of America blamed a lot on homeowners.
“A significant number of customers in the trial modification period are not completing the requirements to obtain permanent modifications,” says Barbara Desoer, president of Bank of America Home Loans.
Mary Held says that’s a lot of hogwash. Her family has been jumping through Bank of America’s hoops for more than a year.
“It’s no longer a fight for our home. It’s now to me a fight between what is right and what is wrong,” said Mary.
A forensic audit found four serious truth-in-lending violations in the Held’s original mortgage. They include unfair and deceptive practices, and possible predatory lending.
“They need to pay the price. And they need to help the people that they hurt,” said Mary.
The Held’s received a modification proposal that Mary says was yanked back without notice or explanation before they could even read through it. She’s got so little hope left that she’s packing up.
“You just think that it’s never going to happen and you have to get ready to go,” asked Contact 13 Chief Investigator Darcy Spears.
“Yes. I’ve gotten to a point where I stopped crying and now I just want answers,” said Mary.
Action News has been trying for weeks to get answers from Bank of America, and at the 11th hour, they finally responded.
Click here to read their response
They’ve refused to go on camera, but sent a lengthy e-mail saying despite all the customer complaints, they are focused very heavily on Nevada and specifically Las Vegas.
How aggressive is that focus?
Bank of America says about 18,000 Nevada customers are eligible for HAMP–the government’s Home Affordable Modification Program.
They say they’ve made offers to most of them, and at the end of March, more than 8,500 were in trial modifications.
1,240 are permanent.
As for those who fall outside HAMP, they claim since January 2008, more than 13,000 Nevada customers have permanent bank-originated modifications. But that’s only one-third of the people in Nevada with troubled mortgages.
For homeowners who don’t qualify for mortgage modifications because they simply can’t afford to stay in their home, there’s the short sale process.
Bank of America recognizes the need to improve that, and says they’ve taken steps to shorten response time and improve communication.
But the customers we’ve talked to both in our story and through phone calls and email say communication and response time remain dismal and real help rarely comes.
As for that class action lawsuit we talked about at the beginning of this story, Bank of America is trying to get it thrown out, calling the case a series of “sob stories.”
Their lawyers warn if the case goes forward, it’ll be the “tip of the iceberg” and “floodgates will open” across the country.
Stay with Action News for developments on this investigation.
