Bank of America Sends Struggling Homeowners to India For Help

Bank of America's newly-minted CEO Brian Moynihan announced last week that the company has hired additional loan management staff "to ensure we are doing all we can" to help homeowners. Yet he neglected to mention that any customer seeking guidance on, say, avoiding foreclosure just might reach one of B of A's helpful "home retention" reps -- in Mumbai.

That's where B of A (BAC) has recruited at least some of its loan specialists, according to a November 2009 ad that ran on Indian job-hunting sites including TimesJobs.com and eBharatJobs.com. One thing to note is the experience required for candidates: 0-5 years.

Bank of America spokeswoman Juwana Bauwens confirmed that the company employs loan management personnel in India. Although she described most of these workers as "back-office" staff, some do work with customers in the early stages of delinquency. Bauwens also sought to underline that most of the company's loan mitigation employees are based in the U.S.

"Our India associates have scripts they follow, and they're trained and coached to identify borrowers who are looking for help with a default or loan modification," she said in an interview. "As soon as a customer asks for help with a default or loan modification, they get referred to someone with the home retention team."

That might be more reassuring if B of A didn't have one of the worst records in the financial industry of working with borrowers who need help with their mortgages. Out of a pool of more than 1 million eligible customers, only some 3,200 B of A borrowers have received a permanent loan modification under the federal Home Affordable Modification Program, according to a December report by the U.S. Treasury. By comparison, more than 10,000 Wells Fargo (WFC) mortgage customers had secured permanent modifications (also not so hot, but considerably better than B of A).

It's common, of course, for cost-conscious companies to employ overseas customer service staff. B of A has an entire subsidiary devoted to the practice. But not every company faces the same barrage of complaints about its service. Mortgage customers applying for relief through HAMP have griped about B of A's slow response; habit of losing paperwork; and difficulty getting straight, timely answers, which is vital for anyone facing foreclosure. Meanwhile, B of A's recruitment of entry-level employees to join its home retention team also gives pause.

It's one thing to reach a "slumdog millionaire" for tech support on your nifty new iPad. But that doesn't cut it when your home is at risk and the help on the line is 8,000 miles away and earning peanuts.

Timothy Lilienthal, a spokesman with PICO National Network, a faith-based community organization that is lobbying the Obama administration regarding loan modification, bluntly described the service B of A offers to struggling homeowners as "just horrendous." He also said the company consistently violates HAMP guidelines that direct lenders to make timely loan modification decisions.

That, in turn, reflects a structural obstacle within B of A. It doesn't matter how many loan mitigation specialists the company adds if customers get bounced around between departments without ever reaching someone with authority to help them. Unfortunately, B of A "shows no willingness to address its underlying problems," Lilienthal told me, adding that PICO has repeatedly aired their concerns with B of A executives.

But why pick on B of A? Aren't other lenders also guilty of failing to aid customers in their hours of need? Sure. But B of A is both the largest financial institution in the U.S. and is by some margin the country's biggest mortgage issuer (It's also the biggest holder of bad loans.) If it sneezes, millions of homeowners catch cold.

Moynihan, B of A's former general counsel, isn't to blame for B of A's surfeit of crummy mortgages. Most of the damage occurred under former CEO Ken Lewis, who among other things led the company to acquire subprime chop-shop Countrywide. But clearly B of A's new chief executive is accountable for what the company does now.

Indeed, Moynihan has pledged to do "all we can" for B of A customers. Let's hope the company's staff in India feels similarly.

Photo of Brian Moynihan courtesy of the Greater Boston Chamber of Commerce. Indian call center image courtesy of Wikimedia Commons.