It’s no secret that large banks have not held a positive image with the public since the financial crash of 2008. In 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law. The act was formulated to ensure the financial stability of the nation by enforcing accountability within the financial system. In other words, it was aimed to prevent the financial sector from committing any acts which could compromise the financial well-being of the American consumer. Despite federal intervention, the banks’ questionable activities were exposed. Which scam were the banks using?
Falsifying Paperwork and Other Methods, Forcing Consumers into Foreclosure
The second largest bank in the United States, Bank of America, was recently exposed as having pushed many of their customers into foreclosure. This was done through the falsification of paperwork and documents by their employees when consumers were under the impression that a loan modification was being performed. The modifications, according to the bank, were allegedly made in accordance with Home Affordable Modification Program (HAMP). Moreover, the bank granted bonuses to employees who performed these actions in order to meet monthly quotas for foreclosures.
“Blitzing”
A lawsuit filed against Bank of America revealed that the institution was employing the use of “blitzing”; giving their employees up to $500 in bonuses per month for every ten foreclosures performed. HAMP applications were intentionally denied despite the applicant following all protocols. Other such acts of blitzing included:
- Intentionally ignoring HAMP applications for 30 days whereupon they would knowingly declare them late
- These “late” applications were then rendered expired, forcing the consumer to reapply
- Loan modifications were cancelled on the grounds of “late payments” despite bank records showing that said payments were met timely
Lack of federal intervention has been blamed for the ongoing practices. Rather than prosecuting bank executives for their actions, the American government instead exercised settlement negotiations in the forms of fines.
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Seeking a trustworthy and honest banking institution is difficult. Credit unions on the other hand, are known for taking great care of their customers. Brownsville’s Valley Federal Credit Union can help you get started on a brighter and more secure financial future. Contact a specialist today at 956.546.3108.
