How Bank of America Is Trying to Kill Any Chance of a Foreclosure Settlement
"The problem of delinquent mortgages is the toughest problem our country faces today as we work to put the crisis behind us. Helping to solve it is our top priority."
That's what Bank of America (BAC) CEO Brian Moynihan told a room full of state attorneys general in a speech little more than two weeks ago. His solution for this toughest of problems: Scuttle a proposed national foreclosure settlement.
One state legal official involved in the negotiations over the pact says the financial giant -- which has arguably the worst record in the banking industry of helping struggling homeowners with their mortgages -- is using a "divide-and-conquer" strategy to undermine state support for the foreclosure deal. Bloomberg reports:
The bank tried to get attorneys general to break away from those supporting the proposed accord, Iowa Assistant Attorney General Patrick Madigan said during a recent conference call, according to the person. A second person familiar with the settlement talks said the bank sought to sow dissent among the states, eight of which have publicly criticized the proposal's terms.This way to the "back room"
B of A, the nation's biggest mortgage lender and loan servicer, has made its opposition to the foreclosure settlement very clear. That is, of course, the company's right. As originally discussed, the agreement would've required major loan servicers to reduce borrowers' mortgage principal. Housing experts say that's the best way to prevent foreclosures, while bankers are dead-set against such loan modifications because they would reduce bank profits.
But B of A's efforts to splinter the states investigating foreclosure abuses is beyond the pale -- and unconscionable. Such tactics don't constitute negotiation, in good faith or bad -- it's sabotage. They stink of the back room. How can Moynihan claim that his company is "working to find solutions for people to help them get back on their feet," as he did in his April 12 speech, while also trying to thwart a legal settlement aimed at doing just that?
We're long past the point of taking Wall Street bankers like Moynihan at their word, of course. Hypocrisy loses all meaning when it is woven into a company's business model. There is, after all, no question that banks abused untold numbers of homeowners in illegally forging and rubber-stamping foreclosure documents. Nor have scores of federal and state investigators left any doubt that large loan servicers have performed woefully in "working to find solutions" for distressed homeowners.
Untruth in lending
As for B of A, its abysmal loan-modification record speaks for itself. Customers of the bank have a much lower chance of getting mortgage relief than borrowers working with other financial firms. The multiple state lawsuits charging the company with knowingly misleading homeowners applying for a modification also attest to its grudging interest in their welfare.
The gap between its executives' rhetoric in pledging to work with borrowers and its actions is visible for all to see. Moynihan told the assembled AGs:
Every day we talk to tens of thousands of customers who are facing financial hardship and looking for help. Helping customers remain in their homes where possible is our top priority....Not a chance.Our goal â€"- and my commitment to you â€"- is that we will continue to work hard, devote resources, and lead with energy and creativity to be a part of the solution for communities all over America.
Thumbnail from Flickr user viZZZual.com; Brian Moynihan photo from World Economic Forum, swiss-image.ch/by Michael Wuertenberg via Wikimedia Commons, CC 2.5
Related:
- Why Struggling Bank of America Customers Are Out of Luck
- Why Bank of America is Crying Over Obama's New Foreclosure Plan
- How Bank of America Protects Top Execs -- If Not Customers -- Against Sinking Home Prices
- Justice Denied: How the Feds Are Caving to Wall Street on Foreclosures
- How Bank of America Twists Its Record About Foreclosures