Too-Big-To-Fail Mortgage Racket

Not that we needed any further evidence of the racketeering enterprises run within the mortgage operations on Wall Street, but with the recently delivered testimony of Simone Gordon, a senior collection officer within Bank of America’s mortgage ‘racket’ . . . we got it.

I first questioned whether the activities within the mortgage servicing enterprises on Wall Street rose to the level of racketeering in early 2011 after having becoming aware of Wall Street’s practice of robo-signing mortgage documents in order to engage in the fraudulent conveyance of countless mortgages.

Many individuals responded to my initial commentary and subsequent articles with incriminating details as to how they were being abused by the large banks supposedly charged with helping them modify their mortgages. In truth, the mortgage modification process under the guise of the Home Affordability Modification Program (HAMP) was in fact more often a charade, albeit a painful one at that.

Former Washington insiders Sheila Bair (past chair of the FDIC) and Neil Barofsky (Special Inspector General of the TARP) wrote extensively in their  respective books about the complicit nature of the US Treasury under Tim Geithner in not holding the banks accountable in this process. Let’s not be so discreet. Tim was in bed with his Wall Street cronies, but it was all too many American homeowners who were really getting screwed.

In recent testimony shared in the U.S. District Court in Massachusetts, Simone Gordon pulls back the blanket on the ongoing Wall Street – Washington incestuous, crony, corruptible engagement. I recommend you wear a pair of high boots and/or waders and bring multiple barf bags as you experience the cesspool laid out by Gordon:

Beginning in 2009, I regularly spoke to people who had received HAMP Trial Period Plans, made their trial payments, and who were calling to inquire about the status of their expected permanent loan modification.

Using the Bank of America computer systems I saw that hundreds of customers had made their required trial payments, sent the documents requested of them, but had not received permanent modifications.  I also saw records showing that BoA employees had told people that documents had not been received when, in fact, the computer system showed that BoA had received the documents.

This was consistent with the instructions my colleagues and I were given.

We were told to lie to customers and claim that BoA had not received documents it had requested, and that it had not received trial payments (when in fact it had). (LD’s highlight)

Why was it that they were told to lie?

My colleagues and I were supervised by “Team Leaders”  who were, in turn, supervised by “Site Leaders.” Site leaders regularly told us that the more we delayed the HAMP modification process, the more fees Bank of America would collect.

For added measure, in what can only be compared to a scene from a foreign sweatshop in a faraway land, Gordon lays out that:

Employees who were caught not carrying out the delay strategies that Bank of America instructed were subject to discipline including termination. Employees who were caught admitting that Bank of America had received financial documents or that the borrower was actually entitled to a permanent loan modification were disciplined and often terminated without warning.

Can you spell R-A-C-K-E-T?

For those who would like to read and review the entire 5-page testimony.

There you go, folks. Uncle Sam (aka President Obama and team) lays out a program supposedly to help homeowners modify their mortgage and stay in their homes and the Wall Street banks, in this case Bank of America (NYSE:BAC), out and out lie to American citizens so as to maximize their own profit at their expense.

So I ask, where’s the justice? A token fine of a few billion dollars and pennies on the dollar to a smattering of our fellow citizens? Please.

Why isn’t Brian Moynihan summarily fired? Where are the major media outlets on this story?

The price we really pay as a nation is the continued erosion of any sense of integrity in the system along with a total decimation of trust and confidence in Wall Street and Washington at large.

About Larry Doyle 522 Articles

Larry Doyle embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation. He was involved in the growth and development of the secondary mortgage market from its near infancy.

After close to 7 years at First Boston, Larry joined Bear Stearns in early 1990 as a mortgage trader. In 1993, Larry was named a Senior Managing Director at the firm. He left Bear to join Union Bank of Switzerland in late 1996 as Head of Mortgage Trading.

In 1998, after 15 years of trading and precipitated by Swiss Bank’s takeover of UBS, Larry moved from trading to sales as a senior salesperson at Bank of America. His move into sales led him to the role as National Sales Manager for Securitized Products at JP Morgan Chase in 2000. He was integrally involved in developing the department, hiring 40 salespeople, and generating $300 million in sales revenue. He left JP Morgan in 2006.

Throughout his career, Larry eagerly engaged clients and colleagues. He has mentored dozens of junior colleagues, recruited at a number of colleges and universities, and interviewed hundreds. He has also had extensive public speaking experience. Additionally, Larry served as Chair of the Mortgage Trading Committee for the Public Securities Association (PSA) in the mid-90s.

Larry graduated Cum Laude, Phi Beta Kappa in 1983 from the College of the Holy Cross.

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