We were eligible for consideration for a modification under the DoJ settlement with BoA. After going back and forth with a contractor for over 5 months attempting to satisfy their never ending demand for extra paperwork, we got a letter from the bank saying we were eligible, but because the contractor did not send our phone number in the package to the bank, we had been denied. After a couple more months of back and forth and escalating complaints through the bank hierarchy, we actually ended up getting a modification that, while not perfect, still reduced our interest rate dramatically. The notary from the bank said that almost nobody actually gets the modification - she said that our 9 month turn-around was the quickest she had heard of, most people just give up after the first rejection.
I am sure that a sincere investigation into BoA's practices would reveal systematic denials of some sort, so this article doesn't really surprise me at all. They have never really been held to account for their misdeeds of the past, so there is little incentive for them to reform. The bank has multiple layers of customer service reps whose sole purpose is to block you from moving forward. There is no such thing as speaking to a supervisor; they all seem trained purely in the art of stonewalling. It is truly Kafkaesque.
competition solving these sorts of issues relies on informed, educated consumers.
there is endless debate about how much the government should protect consumers 'from themselves', and I (personally) find merit in opinions from both ends of the spectrum.
with that out of the way:
* home loans, by far, are the most complex product that most consumers will ever evaluate and purchase.
* home loans are also one of the most lucrative products for commissioned salespeople to close.
issues that arise in any sort of B2C relationship are more likely to manifest here. if you agree with the (common) opinion that the industry is rife with unscrupulous business practices and persons, this just compounds things.
I've dealt with similar institutions before. They have to be seen to be playing by the rules, but they use every possible lie and excuse to wriggle out of their obligations. Here's how to beat them:
* Understand that your relationship is entirely adversarial. Play by the rules, but be an asshole.
* Your adversaries will mostly consider themselves decent people, who are forced into a corrupt role. Use the cognitive dissonance against them.
* Create a cross-referenced paper trail so strong that it is impossible for them to pretend that they don't have every document they need.
* Hound them relentlessly on every promise and every lie.
By the time you're done with them, they won't care about their performance bonus. They'll just want you to leave them alone.
For example, here's how you send them an important package of documents:
1. Add cross-referenced meta-data to the package so that, if anything gets "lost", it will be immediately, undeniably obvious.
2. Send the package by registered mail.
3. After the package has arrived, call them to confirm that they've received it.
4. They'll probably "lose" it the first time, so go back to step 1. (Eventually they'll catch on, and stop "losing" things so often.)
5. When they confirm receipt, also ask them to confirm what will happen next, and when. If they don't give a date, tell them that you'll call them back every week for progress reports.
6. Send them a follow-up letter in which you tell them exactly what you sent them (repeat the meta-data), when they confirmed receipt, what they said they'd do, what you said you'd do, a summary of previous correspondence, and so on.
If you catch them telling lies on the phone, you have a golden opportunity. Ask them whether they'd be willing to confirm their statement in writing. When they say, "Yes." grab a pen and get them to agree an exact wording with you. Send them a copy of the wording, remind them that they agreed to these exact words, and ask them to sign it and send it back to you.
Of course, you won't get your signed statement, but they're not going to admit that they lied to you either, and the cognitive dissonance will make them deeply miserable. Hound them.
Neil Barofsky talks about this at length in his book. If you really want to be infuriated, read it to find out how Treasury viewed this program: not as a way to actually help homeowners, but as a way to "foam the runway" for the banks, allowing them to stretch out the period of time over which they could foreclose on all these homes to avoid being overwhelmed by the logistics. Truly disgusting.
For the life of me I cannot understand the logic of massive foreclosure campaigns like the ones the banks have been onto. There is already a surplus of housing for the next few years (outside the obvious top 10 cities) so how does forcing people out of their homes (the ones that have paid up) benefit the banks? the neighbors banks? the neighbors or the town?
Private equity firms are buying the foreclosed houses then turning them into rentals. This was a growing concern in Atlanta when I lived there. It seemed like entire neighborhoods were being bought up.
If those prices are correct then the auctions are priced at less then the price of land, material, and labor. In this day and age it's very difficult to construct a single family home for less than $60K. Unless you are using cheap material, microscopic plots, and a lot of unskilled labor.
The banks are willing to take a bath on their own profit to please private equity investors? That doesn't add up.
There's also an demographic dynamic at play unmentioned in the article. Unfortunately, in Atlanta the racial makeup of the neighborhood has a lot to do with the value of the house.
Articles like this disappoint me, mainly because the system is so skewed now in favor of mega corps that the average joe is left bewildered and overwhelmed and largely impotent in their fight. Remember many of these same mortgage holders were mislead at the time they bough their homes too regarding ARM rates etc.
Wait a minute, isn't that both mail fraud and wire fraud at the very least? I don't think anyone who argue that bankers can't be prosecuted because they didn't do anything wrong has a leg to stand on at this point.
I am sure that a sincere investigation into BoA's practices would reveal systematic denials of some sort, so this article doesn't really surprise me at all. They have never really been held to account for their misdeeds of the past, so there is little incentive for them to reform. The bank has multiple layers of customer service reps whose sole purpose is to block you from moving forward. There is no such thing as speaking to a supervisor; they all seem trained purely in the art of stonewalling. It is truly Kafkaesque.