Bank of America should be investigated for its treatment of distressed homeowners, said Representative Maxine Waters, the top Democrat on the House Financial Services Committee.
Employees say the lender told them to delay applications to the Home Affordable Modification Program, or HAMP, to increase fees and send customers into foreclosure, Waters wrote in a letter to the watchdog for the U.S. government’s bailout program.
She cited a June 14 Bloomberg article based on court documents in making the request.
'Foreclosure is often the most profitable end result for a servicer that does not own the loan they are servicing', the California Democrat wrote to Christy Romero, the special inspector general of the Troubled Asset Relief Program.
'It goes without saying that this is an outright abuse of consumers and government mortgage-assistance programs'.
Bank of America has denied the allegations.
In the meantime, Bloomberg also reports that Deutsche Bank has reached a settlement with the city of Los Angeles to resolve a lawsuit claiming the bank acted like a 'slumlord' and let foreclosed homes in low-income neighborhoods fall into disrepair.
The bank and the Los Angeles city attorney filed a joint notice of settlement June 17 in California state court. The two sides reached an agreement in principle and are in the process of completing the documentation, according to the filing.
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