Unbowed by the excruciating testimony provided by seven former employees in the Home Affordable Mortgage Program lawsuit currently under way in Boston, Bank of America (NYSE:BAC) has filed its response to the homeowners bringing the lawsuit and has taken aim at those former team members, as well.
What was the bank's rejoinder to the allegations of a home loan modification process riddled with deceit and disrespect to both employees and homeowners? Basically, B of A has painted the former workers as miscreants and liars.
It is not surprising, of course, that Bank of America would deny such charges and try to discredit those who have outlined odious business practices such as destroying paperwork submitted in a timely manner by borrowers in dire need of a loan modification -- then telling those customers it never received the documents in the first place.
But, the bank's claims that these seven people have provided testimony in this class action case merely because "at least six" of them were fired from the bank -- and therefore have an ax to grind -- seems absurd. Surely, perjuring oneself solely to try to smear the reputation of a former employer seems ludicrous at best.
At any rate, B of A's reputation will scarcely notice another ding. The bank has an overwhelmingly lousy reputation in general, and its handling of mortgages has been abysmal.
Not that Bank of America is alone in that regard. The National Mortgage Settlement -- the pact that introduced the term "robo-signing" into the post-financial crisis lexicon -- was a direct result of all manner of mortgage-servicing shenanigans on the part of Citigroup (NYSE:C), JPMorgan Chase (NYSE:JPM), and Wells Fargo (NYSE:WFC), as well as Bank of America. Notably, a recent report from the settlement's monitor has observed that all of these banks still need to clean up their acts, since none of the above signatories received a perfect score for correctly administering the terms of that agreement.
B of A: The "blitz" was a good thing
Just as Bank of America states that the ex-employees "wildly misrepresented" what they did during their tenure with the bank, some of its own explanations seem suspect.
On the subject of the "blitz," during which it was alleged that up to 1,500 loan modification files were destroyed simply for being over 60 days old, Bank of America takes an interesting stance. Blitzes were a good thing, the bank asserts, whereby the bank approved overtime so employees could speak with borrowers who were presumably unreachable during weekdays -- all in an effort to approve as many eligible applicants as possible.
Considering that whistleblowers at other mortgage units -- including Countrywide -- have previously described just the type of purging behavior portrayed by the seven former workers, I would say that B of A's characterization has less credence than that of the declarants.
Where the truth lies
Similarly, the bank's allegation that the former workers are motivated to lie because they were fired from the bank doesn't convince me. The bank notes that most, if not all, of these employees had been let go for inappropriate workplace behavior, but I can certainly imagine that complaining about such untoward and unethical practices could be construed by management as "inappropriate."
For instance, William Wilson testified that he told supervisors on more than one occasion that the bank's practices were "ridiculous and immoral." I can certainly see where this behavior may have been considered inappropriate by his bosses, can't you?
Who is telling the truth? I don't know, but I am definitely leaning in the direction of the homeowners and ex-workers who claim to have endured the pain of dealing with the Bank of America mortgage machine. If you need convincing, just read a few of the hundreds of comments left by readers of some of the articles referenced above. In the court of public opinion, at least, I think Bank of America has already lost.