Nevada AG charges Bank of America with luring families into loan mod program under false pretenses

A closer look at the the complaint against Bank of America

The complaint filed by Nevada’s attorney general against Bank of America charges the bank with luring families into its loan-modification program — supposedly to help them keep their homes — under false pretenses; with giving false information about the program’s requirements (for example, telling them that they had to default on their mortgages before receiving a modification); with stringing families along with promises of action, then “sending foreclosure notices, scheduling auction dates, and even selling consumers’ homes while they waited for decisions”; and, in general, with exploiting the program to enrich itself at those families’ expense.

The end result, the complaint charges, was that “many Nevada consumers continued to make mortgage payments they could not afford, running through their savings, their retirement funds, or their children’s education funds.

Additionally, due to Bank of America’s misleading assurances, consumers deferred short-sales and passed on other attempts to mitigate their losses. And they waited anxiously, month after month, calling Bank of America and submitting their paperwork again and again, not knowing whether or when they would lose their homes.”

Even a routine mortgage refi became a nightmare

Recently Dana Milbank, the Washington Post columnist, wrote about his own experience: a routine mortgage refinance with Citibank somehow turned into a nightmare of misquoted rates, improper interest charges, and frozen bank accounts. And all the evidence suggests that Mr. Milbank’s experience wasn’t unusual.

Notice, by the way, that we’re not talking about the business practices of fly-by-night operators; we’re talking about two of our three largest financial companies, with roughly $2 trillion each in assets.

Politicians consider making the mortgage servicing industry accountable a “shakedown”

Yet politicians would have you believe that any attempt to get these abusive banking giants to make modest restitution is a “shakedown,” says Senator Richard Shelby of Alabama.

The proposed settlement between state attorneys general and the mortgage servicing industry would have banks allot money to mortgage modification. This would be “extorted,” declares The Wall Street Journal. And the bankers themselves warn that any action against them would place economic recovery at risk.

All of which goes to confirm that the rich are different from the average American: when they break the law, it’s the prosecutors who find themselves on trial.

In the days and weeks ahead, we’ll see pro-banker politicians denounce the proposed settlement, asserting that it’s all about defending the rule of law. But what they’re actually defending is the exact opposite — a system in which only the little people have to obey the law, while the rich, and bankers especially, can cheat and defraud without consequences.

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Source: http://www.nytimes.com/2011/03/14/opinion/14krugman.html?src=ISMR_AP_LO_MST_FB

Technorati Tags: mortgage modification, loan modification, Senator Richard Shelby of Alabama, Nevada AG compliant against Bank of America

Related posts:

  1. Few Nevada homeowners are taking advantage of the state foreclosure mediation program
  2. Bank of America loan modification program blames borrowers for low approval rate
  3. Bank of America faces pressure from faith-based groups over loan modifications
  4. Loan modification company seems to have influenced the Nevada state congress to protect industry and not the consumer
  5. Bank of America rejected loan modification despite mediation help

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