Lawsuit: Bank of America Gave Employees Gift Cards for Hitting Foreclosure Quotas
Six former Bank of America employees have filed a class action lawsuit alleging the bank instructed them to mislead home loan customers and gave workers Target and Bed Bath & Beyond gift cards and $500 monthly bonus checks for placing 10 or more accounts in foreclosure.
Investing website Motley Fool published excerpts from affidavits making the startling allegations:
Employees were rewarded by meeting a quota of placing a specific number of accounts into foreclosure, including accounts in which the borrower fulfilled a HAMP [Home Affordable Modification Program] Trial Period Plan. For example, a [loan collector] who placed 10 or more accounts into foreclosure in a given month received a $500 bonus. Bank of America also gave employees gift cards to retail stores like Target or Bed Bath & Beyond as rewards for placing accounts into foreclosure.
President Barack Obama said the HAMP program, which was announced in early 2009, would “create new incentives so that lenders work with borrowers to modify the terms of subprime loans at risk of default and foreclosure.”
In an email to Bloomberg News, Bank of America spokeswoman Jumana Bauwens vehemently denied the allegations.
“These allegations are absurd, patently false and contrary to Bank of America’s long-standing policy only to foreclose as a last resort when other available options to help keep people in their home have been exhausted,” wrote Bauwens.