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Bank of America mortgage practices draw complaints, criticism

Bank of America mortgage practices draw complaints, criticism

HELENA — Bank of America’s mortgage lending practices have come under scrutiny nationally, both in the number of complaints filed with a federal agency and in sworn affidavits by some former employees in a lawsuit.

In March, the Los Angeles Times said that Bank of America, which handles customer service on about 15 percent of U.S. home loans, accounted for 30 percent of the mortgage complaints filed with the Consumer Financial Protection Bureau.

The story said Bank of America was named in 15,136 mortgage complaints nationally since the agency began accepting complaints in December 2011. Two-thirds of these complaints were over its handling of loan modifications, debt collections and foreclosures, the story said.

However, Bank of America told the Los Angeles Times that the federal bureau’s website showed that 98 percent of the complaints had been resolved.

“As a result of the Countrywide acquisition, Bank of America became the largest mortgage servicer at the peak of the housing crisis, and the servicer of a disproportionate share of loan types impacted by the economic downturn,” Bank of America told the Los Angeles Times.

It said while the bank made every effort to provide “a good experience for all customers, the servicing of mortgage loans in delinquency or foreclosure predictably results in more frequent customer concerns.”

Salon, an online magazine, reported in June that six former Bank of America employees and a former contractor had turned whistle-blowers and filed affidavits in a civil lawsuit in federal court in Massachusetts.

Summarizing their sworn statements, Salon said the bank’s mortgage-servicing unit “systematically lied to homeowners, fraudulently denied loan modifications and paid their staff bonuses for deliberately forcing people into foreclosure.”

Bank of America used the federal government’s Home Affordable Modification Program “as a tool, say these former employees, to squeeze as much money as possible out of struggling borrowers before eventually foreclosing on them,” Salon said.

In response, Bank of America filed court documents in July that said these whistleblowers “wildly misrepresented their duties at the bank” and declared their claims “impossible,” Huffington Post reported.

“In sum, the declarants could not have witnessed what they claim to have witnessed because they were not in a position to do so — and would not have witnessed such things in any event because Bank of America’s actual practices were diametrically opposite,” the bank’s court filing said, according to Huffington Post.

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