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Bank of America: Ex-workers made ‘wild misrepresentations’ in HAMP suit

Bank of America on Friday said former employees who filed court statements in a mortgage-modification lawsuit made “wild misrepresentations” about their actual roles in the federal loan program.

The former employees filed their statements as part of a federal lawsuit in Massachusetts brought by homeowners who claim the bank wrongly denied them mortgage modifications under the Home Affordable Modification Program. The former workers said the bank used incentives, such as cash or gift cards, to push them to delay or reject modification requests.

But the Charlotte bank, in Friday’s court filing, denied those assertions and said most of the former workers had “only minimal involvement” with the HAMP program.

The bank said that because of the nature of the workers’ jobs with the company, they “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.”

Also, the bank said, the former workers had motives to “manufacture false allegations.”

“... At least six of the seven were fired for inappropriate behavior, including threatening violence against a coworker, sending inappropriate text messages to a member of his team and bullying his associates,” the bank said.

The homeowners in the Massachusetts lawsuit, which dates to 2010, are pushing for class-action status, which Bank of America is opposing.

The statements of the former bank employees – six of whom worked for the bank, while the other was a contractor – have led to a racketeering lawsuit filed this week against the bank. A law firm involved in the Massachusetts case filed the racketeering suit in Colorado.

HAMP was designed to lower monthly mortgage payments for struggling borrowers after the collapse of the housing market.

The former employees’ statements have attracted the attention of Joseph Smith, overseer of the $25 billion settlement reached with 49 states and five major banks, including Bank of America, meant to curtail mortgage-servicing abuses. Smith, who last month called the allegations in the statements serious, announced at that time that he would be examining the Massachusetts suit for any evidence that the bank violated the settlement.

The statements describe $500 bonuses for bank workers who placed 10 or more accounts into foreclosure in a month. The bank also gave Target and Bed Bath & Beyond gift cards for sending homeowners into foreclosure, according to the statements.

Bank of America, in its response Friday, said workers “contrived allegations” that they were given those incentives to foreclose on borrowers or deny HAMP modifications.

A hearing on the class-action petition is set for next month.

Roberts: 704-358-5248; Twitter: @DeonERoberts
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