Colorado-based Urban Lending Solutions is far from the headquarters of Bank of America, the nation’s second-largest bank based in in Charlotte, North Carolina.
But the firm founded by Chuck Sanders, a former Pittsburgh Steelers running back, played a key role in Bank of America’s efforts to stall or delay paperwork tied to mortgage-modification efforts meant to help borrowers avoid foreclosure, according to a new report from Bloomberg.
The foreclosure-prevention campaign operated by Bank of America was under the supervision of the U.S. Treasury and U.S. housing officials, dubbed HAMP, or the Home Affordable Modification Program. Since its inception four years ago, HAMP has come under fire from many lawmakers, watchdog groups and consumer advocates for underperforming and allowing banks to take advantage of borrowers.
Bloomberg stated that Bank of America faced more than 15,000 complaints in 2010 from its role in the government’s HAMP campaign. Urban Lending, one of the vendors handling grievances from lawmakers and regulators on behalf of borrowers, also operated a mail-processing center for HAMP documents.
“Instead of helping homeowners as promised under agreements with the U.S. Treasury Department, Bank of America stalled them with repeated requests for paperwork and incorrect income calculations, according to nine former Urban Lending employees,” reads the Bloomberg report.
Some borrowers were even sent into foreclosure or pricier loan modifications padded with fees resulting from the delays, according to the sources that spoke to Bloomberg.
Here’s a key takeaway from the Bloomberg report:
“The accounts of the former employees help explain why Obama’s plan fell far short of the 3 million averted foreclosures targeted in 2009. Relying on the same industry that sold shoddy mortgages during the housing bubble and improperly sped foreclosures afterward, HAMP resulted in still-active modifications for 905,663 homeowners as of the end of August, or 13 percent of the 6.9 million people who applied.”