BofA Whistleblower Says Bank Defrauded Federal Mortgage Program

Wall St. Cheat Sheet

According to a complaint by whistleblower Gregory Mackler, Bank of America apparently created false bottlenecks for homeowners intending to receive mortgage loan modifications under a federal program, while all the time availing itself of the financial incentives offered for its participation in the program.

Don’t Miss: Treasury Sells $6 Billion in AIG

Mackler’s complaint was unsealed in federal court on Wednesday. According to the suit, “the bank and its agents routinely pretended to have lost homeowners’ documents, failed to credit payments during trial modifications, and intentionally misled homeowners about their eligibility for the program.”

“In other words, BoA has had it both ways. BoA has continued to maximize the value of its mortgage portfolio with anti-HAMP modification practices and managed to make money by committing fraud on homeowners,” the document continued.

This lawsuit, and another previous whistleblower complaint by Kyle Lagow in February, may already be covered by the $1 billion False Claims Act settlement between the bank and the U.S. Attorney’s Office for the Eastern District of New York. A whistleblower may earn up to 25 percent of the settlement amount under the False Claims Act in case the complaint is successful.

Read more insightful stories at Wall St. Cheat Sheet:

ECB Holds Rates Steady.
Jobless Claims Bounce Off 4-Year Lows.
How Will the Fed Tackle Inflation?

To contact the reporter on this story: Alex Capel at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

Rates

View Comments (1)