And it’s here where the new allegations about Bank of America Corp (NYSE:BAC) come into play. According to a handful of affidavits recently filed in the case by former employees of the bank, they were instructed to intentionally delay the loan modification process, and to deny otherwise qualified applicants for made-up reasons. They were even rewarded for sending homeowners to foreclosure. “[Supervisors] regularly told us that the more we delayed the HAMP modification process, the more fees Bank of America Corp (NYSE:BAC) would collect,” one former employee said. He went on to note:
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 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 Corp (NYSE:BAC) also gave employees gift cards to retail stores like Target Corporation (NYSE:TGT) or Bed Bath & Beyond Inc. (NASDAQ:BBBY) as rewards for placing accounts into foreclosure.
My point here isn’t to pile on top of Bank of America or even its purported partner-in-crime, the Treasury Department. For what it’s worth, I both own Bank of America Corp (NYSE:BAC) stock and am a relatively content customer.
My point is instead to highlight the unfortunate reality that most of the nation’s largest banks aren’t run for their customers, or, for that matter, their shareholders. And lest there be any doubt about the latter, over the past five years, Bank of America’s stock has returned a negative-50% while the S&P 500 is up by 35%. It accordingly follows that while the executives responsible for policies like these will invariably receive their exorbitant salaries and bonuses, the responsibility to actually bear the financial consequences will fall to those who own its stock.
The article How Bank of America Defrauded America originally appeared on Fool.com and is written by John Maxfield.
John Maxfield owns shares of Bank of America. The Motley Fool recommends and owns shares of Bank of America.
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