Bank of America Foreclosure Reviews: How the Cover-Up Happened (Part IVB)
This post continues our discussion of how Bank of America and its consultant, Promontory Financial Group, made concerted efforts to ignore and suppress evidence of harm to borrowers who asked for what was supposed to be an independent review of their foreclosure.
Overview of the Bank of America Foreclosure Review Series
As we described in earlier posts in this series (Executive Summary, Part II, Part IIIA, Part IIIB, and Part IV), OCC/Federal Reserve foreclosure reviews meant to provide compensation to abused homeowners were abruptly shut down at the beginning of January as the result of a settlement with ten major servicers. Whistleblowers from the biggest, Bank of America, provide compelling evidence that the bank and its independent consultant, Promontory Financial Group, went to considerable lengths to suppress any findings of borrower harm.
These whistleblowers, who reviewed over 2500 files and tested hundreds more in the attenuated start up period, saw abundant evidence of serious damage to borrowers. Their estimates vary because they performed different tests and thus focused on different records and issues. When asked to estimate the percentage of harm and serious harm they found, the lowest estimate of harm was 30% and the majority estimated harm at or over 90%. Their estimates of serious harm ranged from 10% to 80%.
We found four basic problems:
The reviews showed that Bank of America engaged in certain types of abuses systematically
The review process itself lacked integrity due to Promontory delegating most of its work to Bank of America, and that work in turn depended on records that were often incomplete and unreliable. Chaotic implementation of the project itself only made a bad situation worse
Bank of America strove to suppress and minimize evidence of damage to borrowers
Promontory had multiple conflicts of interest and little to no relevant expertise
We continue our discussion of the third major finding below.
Check it out here…