A news report from Curtis Black, Community Media Workshop
Bank of America has objected that a new lawsuit by the Illinois attorney general – charging that the bank’s subsidiary, Countrywide Financial Corp., discriminated by steering minority homebuyers into risky subprime loans – covers practices prior to BoA’s takeover of Countrywide in 2008.
But those same borrowers could be facing foreclosure at BoA’s hands today, according to a new report from National People’s Action.
The network of community organizations found that Bank of America is “Chicago’s biggest forecloser and among the top owners of foreclosed properties” which lead to declining property values and increased debt for struggling homeowners.
Bank of America was responsible for 4,000 home foreclosure filings in Chicago in 2009, representing 17 percent of total filings in the city, according to the report. The bank is on track to issue over 3,000 additional home foreclosures this year, NPA says.
According to the report, BoA, the largest service of loans in foreclosure in the nation, had over 1 million loans eligible for modification in the Home Affordable Modification Program, but offered permanent loan mods to less than 70,000 of those lenders – a mere 5.2 percent.
“Bank of America is bad for American neighborhoods,” said Theresa Welch of the South Austin Coalition in a release. The Bank “controls the fate of more mortgages and homeowners than any other single company in America” and “therefore has a unique responsibility to deal aggressively with the foreclosure crisis.
“Bank of America must do a better job stemming foreclosures and help put an end to the devastation foreclosures are causing in local communities and on the nation’s economy.”
In Chicago, under pressure from community groups, Bank of America agreed to a pilot program with the Southwest Organizing Project and the Greater Southwest Development Corporation last year. The bank is cooperating on outreach to troubled homeowners and assistance with filling loan modification requests.
Though community groups are still awaiting results, the effort represents the kind of engagement BoA needs to undertake around the country, said Gordon Mayer of NPA. [Mayer is the former vice president of Community Media Workshop.]
SWOP is still waiting to see if the bank will make permanent the loan modifications that have resulted from the pilot, said David McDowell. “It’s still moving forward, but it’s a long process,” he said.
“Our goal has been for Bank of America and other banks to become more proactive” in addressing the foreclosure crisis, he said. He noted that Bank of America is the bank with the most foreclosures in SWOP’s area.