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Denials and Discrimination With a Bank of America Short Sale

Your short sale with Bank of America has been declined. The buyer does not qualify.

No other explanation. All documents are in, buyer prequal with a local lender, proof of funds for deposit, copy of the 1% deposit check, required documents by BOA signed by the buyer. All good. (No, not preapproval, why would the buyer pay the money up front before they knew how long it would take you, if you would approve the sale, etc.) We put homes under deposit all the time with these prequals from our reliable and trustworthy local lenders. Even you, Bank of America, will issue a prequalification pending appraisal, verification of income/assets, etc.

This is not the first problem we have had in negotiating this short sale, this is our fourth buyer. One couldn't wait and purchased a different home, one decided to purchase in a different area, and the last one didn't agree to the price after months of waiting.  I was given the magic number for a price and told how quickly it would move forward as they had everything they needed from the seller. Just get another offer at or above the price and things should go smoothly, even quickly. So I did just that, within a few days of going back on the market I got a new offer at the magic number.

What they told me couldn't have been further from the truth.

My sellers have experienced so much hardship in the past few years, no one should have to go through this. First he got in a very bad accident, was unable to work for a long time, and when he could work again he couldn't find a job. She had a good job, but not enough to carry the house and the family. So the search for a new job took them to Florida, near her parents. They moved with their four year old son and expecting a new baby.

When they moved they did everything right, they winterized the house, they cleaned, they arranged for lawn maintenance, they kept the power on. Things were on target to finally get back on track, close the book on a very difficult chapter of their lives.

And then things went wrong. The baby she was expecting came a bit early. I won't go into detail but every day is a crisis. The baby is battling for his life daily, extended stays in the hospital, which is an hour and a half from where they live, doctors visits to all sorts of specialists. And as I said, every day is a challenge, will he live or not. I cannot imagine what that would be like, but at no time did I hear complaints, every time I asked for something they jumped to it and found what the bank requested. They are amazing people.

As I said, this go around with Bank of America has been painful at best. First it was farmed out to Stewart Lender Services, and that happened quickly. The short sale was declined by a Bank of America short sale negotiator one week, then when I resubmitted it was with Stewart Lender Services.

Discrimination by Bank of America based on a name. 

One of the first things I noticed was that everyone I tried to reach, from the customer care rep assigned to us at BOA to the short sale negotiator with Stewart all had their voice mails in Spanish. I didn't think much of it at first, but it became more difficult to communicate as no matter how hard i tried I could not understand the negotiator. And of course I didn't know what any recordings said.

Could this really be because of my client's name?

I called back and requested to speak with a team member immediately from Bank of America Customer Service. When I hinted at this being discrimination, she denied it. It was obviously my fault or my clients fault.

The next time I spoke with our assigned customer service rep he admitted that the file was with a Spanish speaking group. I informed him my client was of Portuguese descent, he did not speak Spanish, spoke English with no accent and I would have no way of knowing if he was born here or not. And I don't speak Spanish, so I don't need be in the Spanish group either.

Next thing you know I have a new Short Sale negotiator assigned to us at Stewart Lending. This was a woman from the midwest, I was out of the Spanish loop. It was as if our first negotiator and the Spanish speaking contingent never existed! I was shocked that they would pigeon hole people based on someone's name. Not a good tactic at all. To make decisions on what team a client should be assigned to based on their name is discrimination in my book. and my clients book too.

All documents were in, now they were reviewing the file. So we waited and waited and waited. More than a week after the drop dead date for all documents to be in I got a call, the short sale was being declined because:

  • The income tax returns weren't signed. (They were at their request months before)
  • We were missing the efile confirmation page. (They had asked me to have the clients sign the copy of the tax returns, had never asked for that)
  • They needed an explanation for a $678 refund from the State of Connecticut.

In literally minutes I got them the efile confirmation page and a signed explanation of the $678 refund. They moved half way through the year and overpaid the taxes.

They were still closing the file because we were over the time limit. I made a call to our customer service manager at Bank of America, got someone else because he was not available, and she did her level best to make sure they accepted the documents and moved on with the short sale. And she did.

Until they declined the buyer, for reasons unknown.

Yes this is an FHA loan, we have crossed every t and dotted every i. My clients go through hell on a daily basis wondering if this is the last day they will have with their sweet baby. Their lives have been turned upside down and yet they come through, each and every time, with documents, with anything and everything Bank of America has wanted.

I wouldn't blame my clients if they just turned their back on the house and the short sale. They have a 6 month old who fights for his life every single moment, they have a 4 year old who is like all 4 year old boys and has needs and wants, they are trying to deal every day with things I cannot imagine. Yet they have tried to "do the right thing". If Bank of America can't "do the right thing" why should they?

This particular Bank of America Short Sale has gone from feet dragging, to discrimination and now to unbelievable. How can we ever expect this real estate market to heal? In our area we are seeing a rise in short sales, an increase in the number of active listings and a decrease in the number of sales.

Most of the short sales just sit and sit because buyers and buyers agents do not want to deal with the waiting, with the disappointment, with the foolishness. Yes, there are some that move through the system like clock work, but not many. If this house ends up in foreclosure the value will plumet. It has already been vacant for a year, and we all know how that ends up. 

I have had a decision in 24 hours on a short sale recently and the bank lost more than $300,000. But it wasn't Bank of America.

And Bank of America, as well as your representatives at Stewart Lender Services should have at least had the courtesy to tell us why the buyer was declined. 



Andrea Swiedler, Realtor, Southern Litchfield County Real Estate

2017 President, Greater New Milford Board of Realtors

2017 Connecticut Magazine 5 Star Realtor


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Coldwell Banker Residential Brokerage

Litchfield County Regional Office,375 Danbury Rd, New Milford, CT 06776


© Andrea Swiedler 2009 - 2017

 Always do right. This will gratify some people and astonish the rest. - Mark Twain

Comment balloon 67 commentsAndrea Swiedler • July 01 2014 10:47AM


Can I add that Ocwen sucks too.  Frankly I think they just really want to foreclose because my seller has a VA loan and the bank won't loose a dime.

Posted by Tammy Lankford,, Broker GA Lake Sinclair/Eatonton/Milledgeville (Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668) about 5 years ago

Tammy, you can add whatever you like and I will agree. It is just so frustrating for all concerned, except perhaps the lenders. 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 5 years ago

Yeah that's pretty terrible, it's definately a process they put homeowners through and they don't seem to care if they lose the buyers or not. If it gets farmed out to a loan servicer, it's even worse because the servicers get paid to have the file so they prolong it as long as they can so they keep getting paid. I agree with Tammy that Ocwen is absolutely awful as well.

Posted by Steve Wilhelmy (Keller Williams Classic Realty Northwest) about 5 years ago

Andrea, Tweeted out.  Absolutely ridiculous.  My experience with BoA a couple of years ago almost cost a veteran his chance to buy a home because their Atlanta office couldn't get their act together.  No communication, delay after delay.  I pray this gets resolved quickly in your clients' behalf, this is one stress in life they don't need nor should they have to endure.

Posted by Liz and Bill Spear, RE/MAX Elite Warren County OH (Cincinnati/Dayton) (RE/MAX Elite 513.520.5305 about 5 years ago

Steve, in my own little perfect world this just wouldn't happen, none of these horror stories. But then again, the real world is quite a bit different. So, as long as they can hold on to it they make money, interesting. Very, very interesting. 

BLiz, thank you, I needed that. It is amazing isn't it? Why is my question, why on earth put people through these gyrations if they have no intent on letting it sell in a short sale at the end of the day. My sellers are going through enough with the baby. 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 5 years ago

This is....well, since this is a family website, I won't say what I'm thinking. I have retweeted/reblogged and shared all over. My thoughts are with you and that little family

Posted by Emmary Simpson, Serving Las Cruces, NM (Las Cruces Homes and Land) about 5 years ago

Emmary, thank you so much. I knew I could count on my AR friends to help. They just wanted to do the right thing. 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 5 years ago

Sorry all the parties involved are being put through these hoops. BofA shouldn't have America in their my opinion.

Posted by Janet Fetterman, Selling Luxury Lifestyles... (Royal Shell Real Estate Inc) about 5 years ago

What a shame and a sad tale.  I wish the Bank of Beelzebub would do the right thing.  Not only are the sellers going through the wash, but the buyers too!  The sellers don't need this, and please let them know how much support and sympathy they have in your efforts.  

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) about 5 years ago

Janet, now that is a thought. These types of situations just leave me speechless.

Carla, thank you. I hope they do the right thing too. It is so difficult to give my clients any bad news, they have enough already. 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 5 years ago

On the eve of our nations Birthday we have a bank with the audacity to have America in it's name and bending over backwards to find any excuse to deny a short sale.  A buyer rejection is in excusablee especially as they have not seen the detailed financials and have a letter from a very qualified local lender with a great reputation in that end of the state.

Bank of America, shame on you    A G A I N!!!!!!

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) about 5 years ago

Ed, amazing isn't it? I am mystified. I am at a loss here. Thank you. 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 5 years ago

Andrea - My Brother was treated very poorly by BoA. In a down market, they (BoA) turned down a full price offer and countered an additional $ a down market! They made him wait six to seven months, letting them believe that a FULL PRICE OFFER would be good enough. Old habits die hard, huh BoA?  I'm with Janet #8, they should drop the America from their name. I wish you and your Clients the very best of luck.

Posted by Jeff Stevens, Jeff Stevens REALTOR®/Associate Broker (Berkshire Hathaway HomeServices New Mexico Properties) about 5 years ago

Sounds like a real nightmare with no end in sight. I must say BofA has been extremely disappointing, even in a straightforward transaction with a client that has a credit score of well over 800, so it's not really discrimination, just lack of organization, I'd say.  Procedures are still extremely cumbersome and it's never the same person that handles the transaction, so one needs to start, quite literally, practically all over again each time, looking for the same documents. Shame.

Posted by Olga Simoncelli, CONSULTANT, Real Estate Services & Risk Management (Veritas Prime, LLC dba Veritas Prime Real Estate) about 5 years ago

Jeffrey, how smart of them. It just floors me, really floors me. I don't recommend them to buyers for a mortgage, haven't for years. And this is the reason why.

Olga, the discrimination came into play when they decided that my clients needed to be in the Spanish speaking group. They put them in a box based on a name, and to me, that is discrimination. I am sure the Spanish speaking people appreciate the ability to speak Spanish, but you need to request it. My client was not happy when that happened to me because they knew why it happened. BOA drew an erroneous conclusion based on a name. 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 5 years ago

This bs has been going on for years. There is no excuse for the process to be so difficult and time consuming. It just proves that many lenders and investors just don't really want to approve short sales. Sellers might want to just press for a DILF and be done with it.

Posted by Jeff Pearl, Full Service Full Time Realtor (RE/MAX Distinctive / LIC in VA) about 5 years ago

I imagine that happens more frequently than we know and goes unreported.

Posted by Jeff Jensen (The Federal Savings Bank/Lending in 50 states) about 5 years ago

Jeff P, you are right, there is no excuse. And I agree, I don't think they really want to approve the short sales.

Jeff J, I am sure of that. 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 5 years ago

Andrea first all I feel for your clients. That is a ridiculous situation to have to deal with with a baby in critical condition. How they're putting up with B of A I have no idea - or why?  And I know for sure that they've got an agent on their side that will pull out all the stops and then some to do the right thing.  Clearly B of A isn't going to do the 'right thing' and we all know how often this goes on - a LOT.   My guess is they don't want to approve a short sale and have much more to gain in not doing so. Been there done that and I'm done doing short sales. Banks have gotten worse and worse in approving shorts, especially this past year.  I'd like to say good luck.....but unless a miracle happens maybe those folks should give back the keys.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) about 5 years ago

Bank of America, like Countrywide before it, is the worst bank for a short sale.  Sounds to me as if you might have a case for the Attorney General in your state!

Posted by Don Sabinske, Sabinske & Associates Inc. (Don Sabinske, Sabinske & Associates Inc.) about 5 years ago

Anna Banana, isn't it though? I just don't get it. And how do you just say that the buyer is declined? With all documentation that says otherwise? Just forget it is something I usually don't say to my sellers, but in this case, what else can I say? If we put it back on the market and another offer comes in, I will have to tell the agent that BOA does not want to approve the short sale, no matter what they say. 

Don, I am not sure what route we are going to go at this point. But I will try anything and everything that won't land me in jail. 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 5 years ago

BofA is evil.  There is no other explanation for the way they jerk people around -- buyers, sellers, and especially the listing agent.  I had a short sale experience with them last year; it was a nightmare.

Posted by Dianne Goode, Realtor/Broker (Raleigh Cary Realty) about 5 years ago

Honestly it sounds like the poor sellers have their hands full with the sick baby. As a parent that would be my first, second, and only concern.

I say leave the keys under the mat and tell Bank of America where to stick it. Will say a prayer for the family.

Posted by Doug Rogers, Your Alexandria Louisiana Agent (Bayou Properties) about 5 years ago

I do a lot of short sales. I have seen all the horror stories and everything else connected with short sales. While I don't know any of the particulars of this case other than what you write here, I have found that in this situation there are two things you can do: (1) if you are in Equator (and it seems like you may not be there) or some other short sale program, you can ask to speak with a supervisor. I don't believe that your seller was turned down because of discrimination. Usually I find that it is a missing document. (2) It may also be that you are much too nice. What you have to do is to learn to scream at the people at the bank. It is upsetting as all get out. I always feel like a horrible person when I do it (after all, the clerk on the other end has nothing to do with the decisions), but it seems that if you scream loud enough and request a supervisor enough, then you will finally get someone who can make a decision. More than likely they turned down the SS because you are missing some documents (which they haven't told you) or they wanted more money or something.

Ask to speak with a supervisor and tell them that you want an answer. When you get a supervisor, you will finally get your short sale approved. I am not licensed in CT, but I wish that somehow I could help you. Most of the banks will approve a SS because they know the sellers are under terrible stress and have terrible problems. Go through your SS paperwork see if you have everything. See if all the documents are signed and dated and initialed as they need to be. Make sure you have 2 years of tax records. Above all, make sure that the hardship letter is signed by the sellers and details all their valid hardships.

Additionally, make sure that you have documents turned in that probably haven't yet been ask for, these include: the arm's length document, and the short sale affidivit as well as the bank form for the short sale addendum. Please feel free to call any time. I don't know what I can do, but perhaps I can help you. Myra Gouger / Realty ONE Group / 702-858-9311.

Posted by Myra Gouger, RRG, ABR, SRES, CPDE, CPRES, Realty ONE, LV. You are my most important client. (Urban Nest Realty) about 5 years ago

Andrea - Your epic adventure with this transaction sounds exhausting for you and your sellers.  These have been exceptional time in home buying and selling.  Especially, with short-sale transactions.  My thoughts are with your sellers and their little family.  

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) about 5 years ago

Dianne, evil just about sums it up. I cannot think of any other reason why they would behave like this.

Doug, I would love to tell Bank of America exactly where they can stick it, and what they can stick in it. And I just may do so tomorrow. 

Myra, thank you. And I can be a bitch when I want to be, so I guess tomorrow that is exactly what I want to be.

Myrl, like they don't have enough. Thank you. At least, the very least, tomorrow I will vent all my frustrations out on the sucker who picks up the phone at Bank of America. And I am thinking that the news people would love this story. It has all the details they love. 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 5 years ago

I did my last short sale for this very reason. If the market turns downward again, I'm retiring. Will tweet for you. 


Posted by Missy Caulk, Savvy Realtor - Ann Arbor Real Estate (Missy Caulk TEAM) about 5 years ago

Missy, thanks. I don't blame you, this is just way to much. I appreciate the tweet, that's exactly what I am looking for. 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 5 years ago

Myra - seems to have found a way to deal with short sales. Thanks for your advice and insights.  As for this situation, it truly is a desperate situation and I hope that things will work out in the end.!  

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) about 5 years ago

Andrea,  I fought for over 4 years with Bank of America on my clients' behalf (even taking over power of attorney when they were deployed!), hundreds of calls, emails, transfers, hangups, documents, STRESS to try to get a short sale approved.  I even lodged a complaint with the OCC and STILL got no where.  We lost 5 contracts that were increasingly lower in the first year ...i fought until my client told me to stop trying.  The home has been vacant since December of 2008-REALLY!  It's now covered in mold, hardwoods buckled, a mess.  DISGUSTING!  These stories make my blood boil.


Sending love and light to your clients.  Many blessings on their beautiful baby for healing and on their medical team for knowledge and compassion.  Many blessings to mom, dad and big brother, hopefully it helps to know that there are so many out here pulling for them and wishing them well.


Posted by Bridget "Mortgage Mama" McGee, Maryland Mortgage Mama NMLS#196068 (SWBC Mortgage 410-960-2061) about 5 years ago

Andrea no one seems to have anything nice to say about Bank of America these days, and with situations like this it is easy to see why.  As a Loan Originator I do not take any joy in seeing a competitor like  Bank of America getting their butt kicked publicly because the rest of us get hit with their fallout.  But behavior like this needs to be made known, and if these negative behaviors start to affect their number of depositors, maybe they will start being more customer focused. 

Bank of America stands to lose far more from a foreclosure than a Short Sale, so you would think the light bulb would come on and they would do what is in their best interest even if they do not care about the homeowner.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) about 5 years ago

I do many short sales with Bank of America, and what you should do is restart the short sale in Equator, which can now be done on an FHA short sale. Denials like this are telling you to start over. Make sure you fall within all of the guidelines for an FHA short sale -- go to HUD and read them.

It sounds like you have gotten the short end of the stick with lousy third-party vendors. These people work on behalf of Bank of America, but they do not work for Bank of America and they are not a Bank of America employee. The first thing you need to obtain is an Approval to Participate. Do you have or did you ever receive an ATP?

Posted by Elizabeth Weintraub Sacramento Realtor Top 1%, Put 40 years of experience to work for you (RE/MAX Gold) about 5 years ago

I'd say Shame on BoA, but they have none.  We can only hope that public pressure may accomplish what professionalism and reason didn't.  

Posted by Dan Tabit (Keller Williams Bellevue) about 5 years ago

Andrea, my heart goes out to your short sale sellers and to you too! The last short sale I closed was with Bank of America and I thought I was going to have a heart attack by the end. After that I have vowed I will never do another short sale, and I don't care if the market takes another crap -- I won't do short sales!

What Myra comment #24 advises is how I finally got my last one approved. Don't stop until you get a supervisor on the phone and yell at everyone until you do. Hope it works out for your clients. I will tweet this too. 

Posted by Pamela Seley, Residential Real Estate Agent serving SW RivCo CA (West Coast Realty Division) about 5 years ago

I believe the problems with the BofA goes way back. It is my opinion that many of their problems go back to corrupt lending practices where loans were made that should not have been made.

My heart goes out to this family.

Posted by John Mosier, Prescott's Patriot Agent 928 533-8142 (Realty ONE Group Mountain Desert) about 5 years ago

It is discouraging at best.  Please pass well wishes along to your clients during their tough times.  I am sure everyone in here wishes them well.

Posted by Mark Don McInnes, Sandpoint, North Idaho Real Estate - 208-255.6227 about 5 years ago

Thank you to the rest of you, and yes Elizabeth we have an approval to participate. I am preparing myself to get nasty today. There is no excuse. At the very least they need to tell us why the buyer was rejected, but I do believe they do this in hopes that the seller and representative will just give up. I am not about to give up, I am going to run my mouth and my fingers to anyone that will listen. 

I do not know if the buyer will wait for this whole process to start all over again. And I do not know if my seller is on board to put it back on the market and jump through all these hoops again. Life centers around family right now, they have tried and tried and tried to do the right thing. If I were them I would shove it up BOA's collective rear end. 

I have also decided that if I do not get anywhere with BOA I will take it out to the news. They just love these kind of stories, it has all the elements they look for. 

John M, "their problems go back to corrupt lending practices'? No, say it ain't so. 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 5 years ago

Hi Andrea, My heart goes out to your clients I will tweet and reblog this for them.  This kind of practice is what several attorney generals sued the banks for and supposedly won.  The banks have been accused, and by your story, are still committing these obtuse unfair behaviors.  My guess is that they rejected your short sale offer because the amount the PMI insurance offered to them for the house was more than your short sale offer.  

Posted by Annette Thor, Residential & Commercial Real Estate Broker in CT (Connecticut Homes and Commercial Fairfield Cty,CT about 5 years ago

Andrea, it's too bad for your clients that BoA gave you and them such a hard time only to be denied. Going to the media is a good idea.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA about 5 years ago

To this day, if you go into any B of is dysfunctional and outdated and out of touch

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) about 5 years ago

Wow...well, Social Media and blogs like this spreading have helped consumers before with BOA...just keep spreading the word and yes, bring it to the media...that might speed some stuff up too.  I see an approved Short Sale in your future lol!

Posted by Brenda Mullen, Your San Antonio TX Real Estate Agent!! (RE/MAX Access) about 5 years ago

Sorry that your clients are endering such hardships.

Now,  WAKE UP!

Big Bank Profile: Bank of America

Federal taxpayer bailout funds received: $199.0 billion
Profits for the years 1998-2008 : $135.0 billion
Profits for the first half of 2009: $7.47 billion
Bank account fees for last 10 years: $66.9 billion
Bank account fees for first half of 2009: $5.26 billion
Change in bank account fee revenue (2003-08): +104.6%
Percent of first half 2009 profit from fees: 70%
Credit card income for first half of 2009: $5.01 billion
Median BofA bank teller wage: $10.73/hour, or $22,328 annually
2007-08 CEO Ken Lewis pay: $34.8 million (779 times the median teller wage)
2008 bonus pool : $6.9 billion
First half 2009 bonuses and compensation pool: $16.6 billion
Cash bonuses (top 5 execs) last 10 years : $459.9 million
Effective tax rate in 2008: 9.5%
Offshore subsidiaries in tax havens : 143
Lobbying fees in 9 months after bailout: $3.6 million
Campaign contributions in 2008 federal elections: $7.2 million

Click here to fight back against big bank greed.

Role in subprime crisis:
  • Bank of America had a hand in the worst of the subprime lending excesses, providing financing to four of the five largest subprime lenders during the years prior to the crash: It helped to finance Countrywide Financial, the country's #1 subprime lender; it purchased and securitized loans from Ameriquest, the #2 subprime lender; it financed loan originations by New Century Financial Corp, the #3 subprime lender; and the bank partnered with First Franklin, the #4 subprime lender, to securitize and sell its subprime loans. Between them, these four firms issued over $320 billion in subprime loans from 2005-2007.
  • Merrill Lynch, which Bank of America acquired in 2009, owned the #4 subprime lender, the now-closed First Franklin Corp.
  • In July 2008, BofA acquired Countrywide Financial, which at the end of 2007, had $15.1 billion worth of mortgages in its loan servicing portfolio in foreclosure.
  • Countrywide was investigated by the FBI, the U.S. Justice Department, and multiple state attorney general offices in 2008 for predatory lending and securities fraud. BofA is still dealing with Countrywide's legal problems, which included numerous lawsuits, some of which have settled, that were brought against the company for its allegedly abusive lending practices and financial practices.
  • Since taking over Countrywide, BofA has failed to adequately change course. BofA initially praised the Countrywide business model and offered its president and COO a $28 million retention bonus to stay and head BofA's mortgage operations. Although BofA agreed to get rid of him after a public outcry, he got to keep the $28 million anyway.
  • Following the Countrywide acquisition, BofA became the largest underwriter of mortgage-backed securities in the country. While BofA itself stopped originating subprime mortgage loans in 2001, it continued to package subprime mortgage-backed securities. This allowed subprime lenders to bundle up their loans and sell them to investors without worrying about the borrowers' ability to repay. It encouraged other banks to keep making subprime loans, and made it possible for the subprime crisis to grow.
  • BofA continues to make money off of subprime securitizations. In September it was announced that BofA will be underwriting a $239 million subprime securitization backed by loans from the CIT Group which was recently on the verge of filing for bankruptcy.
Bailing out the Bank:
  • Bank of America accepted bailouts and backstops totaling $199.2 billion, with taxpayers still on the hook for $57.8 billion, plus an unknown amount from the Federal Reserve's $8 trillion in emergency programs. This money was supposed to help the banks get the economy going again. But little of this money has gone to relieve struggling homeowners and increase the flow of credit to small businesses.
  • Despite its large portfolio of at risk mortgages, Bank of America has started trial mortgage modifications for only 7% of its 835,680 borrowers who are eligible for the Obama Administration's Making Home Affordable Program (and are at least 60 days past due). At Wilshire Credit Corporation, which Bank of America acquired along with Merrill Lynch, the number of modifications is even lower, only 4% of 19,280 eligible borrowers. Ohio homeowners have filed suit against Bank of America for refusing to pursue loan modifications.
  • Bank of America lending to American small business fell by $103 million (an 85.8% drop) through the SBA's flagship 7a program, from 2008 to 2009 (measuring each only for the first 11 months of each fiscal year). It had already fallen by more than 90% in 2008 from 2007 levels. In June 2009, the SBA instituted a new small business loan program called "America's Recovery Capital Loan Program" (ARC), designed to put working capital into the hands of small businesses quickly. Even though the SBA is offering a 100% guarantee on the loans, Bank of America has so far not elected to participate--and with the program due to end as of October 2009, more than $100 million was left unused in the ARC coffers.
  • Although Bank of America's consumer lending declined in 2008, the bank's insider lending to directors and bank executives more than doubled last year to $624 million, the biggest dollar jump in the country.
Lavish spending
  • Just months before Merrill Lynch had to be sold to BofA last year to avoid collapse, Merrill's CEO John Thain spent $1.2 million redecorating his office. His spending spree included an $87,000 area rug and a $1,400 trash can.
  • With eight corporate jets, BofA had one of the largest corporate aircraft fleets on Wall Street, worth an estimated $360-400 million. It costs about $10,000 an hour to fly one of the jets, so the two-hour flight from the bank's headquarters in Charlotte to New York City can cost around $20,000 each way, as opposed to a $200 plane ticket. In February, BofA announced that it would sell three of the jets. However, while some of the other leading bailed-out banks imposed new constraints on the use of corporate jets after taking TARP funds, BofA has refused to follow suit, saying that its "existing policy is robust and direct..."
  • BofA is spending $140 million for naming rights to Bank of America Stadium in Charlotte, home of the Carolina Panthers, and spent an estimated $10 million hosting a five-day "Super Bowl Fun Fest" this February, even after taking taxpayer bailout funds.
Back to Bonuses as Usual
  • BofA and Merrill Lynch awarded its traders and executives $6.9 billion in bonuses for 2008, despite receiving a $45 billion taxpayer bailout. 11 Merrill Lynch executives and traders were paid more than $10 million each, while nearly 700 were received at least $1 million. With this money, BofA could have given each of its bank tellers an estimated $200,000 raise, nearly nine times their median salary.
  • Now Bank of America is increasing senior employees' base salaries to get around limits on bonuses for TARP recipients.
  • Bank of America is offering signing packages to its new Merrill Lynch hires that are even richer than what Merrill paid out at the peak of the economic boom in 2006 and 2007.
  • Ken Lewis, recently announced that he will be stepping down as Bank of America's CEO at the end of the year. His announcement comes at a time when he and the company are under investigation by Congress, the SEC and the New York Attorney General Office and in the midst of lawsuits regarding BofA's merger with Merrill Lynch. When he leaves, he'll take with him an exit package valued at $125 million based on September 30th's closing share.
  • To help pay for its executives' bloated bonuses, Bank of America has made itself the beneficiary on $17.24 billion in life insurance policies for its employees and former employees. The bank gets annual tax-free income from investments in the insurance contracts, helping to offset executive compensation expenses, and then receives another tax-free windfall when employees and former employees die.
Bad employer
  • Since 2004, the Bank of America has cut more than 34,000 jobs. Now, despite receiving a $45 billion taxpayer bailout, BofA has announced plans to eliminate an additional 30-35,000 jobs over the next three years in what would be one of the largest rounds of layoffs in the history of the financial services industry.
  • BofA has had to pay over $41 million since 2001 to settle lawsuits alleging overtime violations.
  • Of the companies whose employees qualify for and receive state health subsidies, BofA is the only financial services firm that regularly ranks in the top ten among states with public data. In some states, BofA employees and their dependents are among the top users of state-subsidized healthcare programs--costing taxpayers an estimated $50 million a year.
Unreasonable bank fees
  • In 2008, 66 percent of BofA's noninterest income, such as income from fees and credit cards, came from individual consumers and small businesses rather than corporate deals and investments.
  • Throughout part of 2009, despite receiving billions in bailouts, BofA more than doubled its daily overdraft limit from $160 to $350, and increased the monthly maintenance fee its MyAccess Checking Accounts by 50%.
  • BofA has automatically enrolled customers in overdraft protection, and when often unknowing customers made charges or withdrawals that overdraw an account, Bank of America charged them $35 per transaction and another $35 if the balance remains unpaid after five consecutive business days, one of the highest rates in the industry. As a result, if a customer incurred a $100 overdraft that remained unpaid for seven days, the APR on what amounts to a consumer loan would be a staggering 3,640%. Also BofA reorders transactions in such a way to maximize fee revenue. Only now that federal legislation to curb overdraft fees is imminent, Bank of America recently announced that it will reduce its overdraft fees, overhaul the fee structure, and the way it clears checks, effective October 19th.
  • BofA recently agreed to pay $35 million to settle a class-action lawsuit in California that claimed the bank manipulated customers' bank accounts to increase overdraft fees.
  • Some states have signed deals with Bank of America to pay unemployment benefits using a Bank of America debit card rather than writing recipients checks. Bank of America hits recipients of unemployment benefits with arbitrary fees. The bank charges fees for using the money, for calling customer service, and for making multiple withdrawals in one day.
Credit card abuses
  • After taking bailout money BofA continues running up credit card interest rates on customers even if they have made every payment on time. In 2007, the bank arbitrarily hiked interest rates on one million play-by-the-rules, pay-on-time customers. Recent reports reveal that BofA has continued to raise interest rates on cardholders who have never missed a payment, even after taking billions in bailout funds. The bank also cancels credit cards, notifying cardholders only after the fact. Millions of Americans have been hurt by the credit crunch as banks like BofA tighten credit to consumers.
  • Former employees of MBNA, which is now BofA's credit card arm, say that they were trained to (1) offer customers higher interest rates even if they qualified for lower ones, (2) deliberately fail to inform spouses of active military servicemen and women that they were legally entitled to a lower interest rate, (3) aggressively sell overpriced credit protection plans with false or misleading information, and (4) convince customers to take on debt levels they could not afford.
Reverse redlining
  • A recent report by the Center for American Progress (CAP) examining bank lending practices in 2006 (the height of the housing boom) reveals that Bank of America and its recently acquired subsidiaries were much more likely to steer Black and Latino applicants than White applicants into higher priced subprime mortgages: 28.1% of Black borrowers and 21.6% of Latino borrowers compared to 11.4% of White borrowers.
  • The CAP reports also shows that the racial disparity was even greater for borrowers earning $100,000 or more: while the percentage of high income borrowers receiving high priced mortgages declined to 8.2% for Whites, the percentage remained above 20% among both Blacks and Latinos. The extent of the disparity and its accentuation among higher income earners raise questions about discrimination in the bank's lending practices. This practice is known as reverse redlining and is prohibited under the federal Fair Housing Act.
Exploiting vulnerable customers
  • Between 1993 and 2003, Bank of America collected an estimated $284 million of Social Security funds from the accounts of elderly and disabled customers in order to get bank fees. In 2004, a California jury awarded damages to the affected customers that could exceed $1 billion.
  • A class-action lawsuit filed in March alleges that Bank of America knowingly "assisted, facilitated and furthered" a $380 million Ponzi scheme affecting 1,500 investors, many of whom were blue-collar workers and civil servants.
  • Former employees have accused Bank of America of exploiting Latino customers who were recruited at embassies and community events. Employees were "coached" to push multiple products on unwitting customers who lacked knowledge of their hidden costs.
  • Former employees also report being pushed to falsely threaten legal action in order to collect on delinquent debt.
Failing Taxpayers and Investors:
  • The SEC has brought a lawsuit against BofA for failing to disclose that it had authorized up to $5.8 billion in bonuses to Merrill Lynch employees even before shareholders voted on the deal. BofA management tried to settle the lawsuit by having shareholders pay a $33 million fine. Since the US government is the largest investor in the bank, American taxpayers would have had to pay the fine to make up for management's misdeeds. A federal judge refused to approve the settlement.
  • American taxpayers and other BofA shareholders will have to pay the legal fees former Countrywide Financial executives like Angelo Mozilo and David Sambol whom the SEC has sued for insider trading. Even though these men allegedly defrauded shareholders, BofA is making the same shareholders foot at least part of the bill for their legal fees, which could top $20 million.
  • In August 2009, BofA agreed to pay $150 million to settle claims that Merrill Lynch had misled investors about bond and preferred stock sales.
  • New York State Attorney General Andrew Cuomo is considering charges against BofA executives over failure to disclose material information to investors on at least four separate occasions.
  • Five public pension funds from Ohio, Texas, Sweden and the Netherlands are suing Bank of America, Ken Lewis and other key executives for millions in damages, alleging that the executives concealed information about Merrill Lynch's losses prior to the shareholder vote on the merger. The pension funds lost millions on their investment in the bank when the share price plummeted subsequent to the merger.
Lobbying against workers and consumer interests
  • BofA's Liam McGee sits on the board of directors and executive committee of the Financial Services Roundtable, which lobbied against the Employee Free Choice Act in every quarter of 2008 and has made joining with the U.S. Chamber of Commerce to defeat it a top priority for 2009. The Employee Free Choice Act will ensure bank workers have a voice on the job and allow them to bargain for stronger whistleblower protections so they can speak out about harmful consumer practices, allow workers to negotiate for job security and better benefits and wages, and increase consumer spending to benefit our communities. In an analyst report, even Bank of America has acknowledged that the bill "would be a de facto wage and benefit increase" and would therefore increase the "spending power of lower income consumer" [sic].
  • Just three days after receiving $25 billion in federal bailout funds, Bank of America was caught holding a conference call with clients to organize opposition to the Employee Free Choice Act and fundraise for those efforts.
  • Together, according to data obtained on Open Secrets, BofA and Merrill Lynch spent $11.0 million on lobbying in 2008 and the first half of 2009, of which $3.6 million was spent in the three quarters since the bailout.
  • During 2008 and the first half of 2009, BofA opposed bills like the Credit Cardholders Bill of Rights and the Foreclosure Prevention Act, Helping Families Save their Homes Act, Truth-in Lending Act, Mortgage Reform and Anti-Predatory Lending Act which would directly benefit consumers.
  • To carry out its agenda, Bank of America has hired any number of unsavory lobbyists, including, in 2009, Andrew Barbour of the Smith-Free Group. Prior to working for Bank of America, Barbour represented the Financial Services Roundtable in its fight against legislation to restrict payday lending to the military because it would have capped interest rates on loans extended to soldiers and their families at 36%. Bank of America also opposed the bill.
  • John Collingwood, one of Bank of America's top in-house lobbyists, cut his teeth at credit card company MBNA (now owned by Bank of America) by driving the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) in 2005. BAPCPA altered bankruptcy laws to heavily favor creditors, making credit card debt more difficult to dispel in bankruptcy, and implementing a "means" test which prevents people above a certain income from being able to get rid of their debt in bankruptcy proceedings.

Bank of America has no reason to be reasonable with you.

Posted by Chad Felter, Providing service through out Hampton Roads about 5 years ago

Andrea- that sounds like another big bank horror story.  My heart goes out to this couple.


Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) about 5 years ago

What a great post today, I had a pleasure reading it, cannot wait for the next one, have a great day! Liz in Chandler

Posted by Chandler Real Estate Liz Harris, MBA, #ChandlerRealEstateAgent (Liz Harris Realty) about 5 years ago

My first short sale 7 years ago was with Bank of America.  It was a nightmare.  I believe I have processed short sales for every major bank and many smaller ones that I only heard of because of the listing I had.  It seemed like B of A got better in the later part of 2008 and 2009 and has since regressed and are worse than ever.  My sympathies to your Sellers.  Their burden is heart wrenching.

Posted by Evelyn Johnston, The People You Know, Like and Trust! (Friends & Neighbors Real Estate) about 5 years ago

The stories & comments about Bank of America short sales could go on and on. On one of my short sales with them I think we are on our 3rd year and 5th servicer. We are close to the finish line but you never know. Miss the close date and we may get booted to servicer #6.

Posted by Julie A. Black, CLHMS, CRS, GRI, Realtor, Broker (KAUAI DREAMS REALTY Kauai Real Property Specialist) about 5 years ago

Andrea, I had one of these but i sent an email to the ceo and had the short sale approval letter with his executive staff negotiated in 2 me.

Posted by Ginny Gorman, Homes for Sale in North Kingstown RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) about 5 years ago

You need to file and have your clients file complaints with the following entities:

Consumer Financial Protection Board 

Fannie Mae - use their website to do a value dispute just to get their attention

and their overseer - Federal Housing

Finance Agency (“FHFA”) - Go to their website - Get Third Party Authorizations for them from your seller - Put the organizations name on the Servicer/Bank slot and submit when you are able to find a fax number to send.

Use Twitter, Facebook, Google+ to get your story out and they will take action.


This is the only way I have been able to save one of my short sales so far that has a sad history with a BK, sheriff's sale and mismanagement but by Wells Fargo.  Have done BOA short sales and the run the gamut - Equator ones usually OK - Fannie Mae....horrid.

Good Luck! Your are soldier on the front lines of the housing mess and doing a wonderful job for your sellers.  Few agents will do what you have done and very few Third Party Negotiators.

Posted by Evelyn Santiago, Managing Broker Heart Realty Group, Inc., Passionate About Real Estate & Our Clients! (Heart Realty Group, Inc..) about 5 years ago

What a terrible story about B of A!  I have had many run-ins with them with my short sales, but nothing like this.  They have a Twitter account (which I used successfully to resolve my issues) that you should try.  Tweet them at @BofA_help with what's going on.  Hopefully a public complaint of this nature will make them do the right thing!  

Posted by Dawn Marthini, Selling Arizona Since 2001 (The Real Estate Firm) about 5 years ago

Short sales!@#$%$#@

One day the pain will stop and back to the new Normal

Posted by Ron Aguilar, Mortgage & Real Estate Advisor since 1995 (Continental Mortgage) about 5 years ago

As I was reading this post and the comments my first thought was to say tweet the help line and I see Dawn Marthini advised the same.  I personally hate dealing with BoA on short sales but tweeting the help line has gotten issues resolved for me so it is definitely worth a try especially with the serious issues your sellers are dealin with.

Posted by Terry McCarley, REALTOR, SRES, CDPE - Cape Coral, FL (REMAX Realty Team - Cape Coral FL) about 5 years ago

Andrea, I feel your frustration, I have done a lot of BofA short sales over the last few years and I too have been driven to the brink of sanity! The best way I have found recently to get things on track is to Tweet BofA. Here's how I do it...I Tweet @BofA_Help I say "Please call Lauri Gibson @ 123-234-5678 about a short sale for 1234 Main St, Redding, CA" I've done this 3 times and it has worked every time. I have gotten a call from the BofA Twitter help within 3-4 hours, I explain the problem, to someone who actually seems to understand the problem, they get the info they need from me and promise that I will hear from them or from my short sale negotiator within 24 hours. This might be hard to belive but they have actually followed through and we have gotten the short sales approved and closed. I still cringe when someone asks me for help with a short sale with BofA as the lender, but I at least I know that if things get off track I can Tweet for some assistance. 

Sure hope you get your short sale done, my heart goes out to your clients.

Posted by Lauri Gibson (Real Living Real Estate Professionals) about 5 years ago

What can I say that others haven't said - Bank of America is a monster. I agree that they probably want this one to go to foreclosure because there's more money in it for them if it does. Never mind that they're trampling over people's lives. 

I know, business is business, but there's a place for honesty in business. They should have said so in the first place and not drug everyone through a wringer of falsehoods. 

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) about 5 years ago

There are lots of issues here.  The thing I note is the same goes on in Public Schools.  If a kid has a hispanic sir name or look he gets up in a class English as a Second Language no matter how good his English or if he speaks Spanish.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) about 5 years ago

Sounds like a typical SS transaction, doesn't it? There are many big banks that fail to process a SS transaction effectively, not just Bank America.

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) about 5 years ago

Andrea - it so unfortunately that BOA has no problems taking short sale participants through the hoops.  I guess it's just in the DNA of the big banks to take this approach.  Too bad that you have to go to the media to shine the light on the situation.  I hope things work out this time around for the buyer and seller and that you keep your sanity until the end!

Posted by Diana White-Pettis, GRI, CDPE, CNE, WHC Upper Marlboro Homes for Sale (Bennett Realty Solutions) about 5 years ago

In the early days, BOA was getting over 10,000 short sale requests A DAY!  I could understand the delays and confusion THEN because it takes time to ramp up for that.
NOT NOW!  They have had years to fix this system.  They just don't want to!

Posted by Dennis and Sunshine Smith, Making a Difference 4U in San Diego Real Estate (RE/MAX By-the-Sea (N Coastal San Diego)) about 5 years ago

Andrea, the B of A CEO's office is really good at resolving issues when he gets irate emails from ActiveRain bloggers. 

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) about 5 years ago

Problems at Bank of America? Shocker!

Posted by Dawn Brenengen, Sales and Management (Dawn Brenengen - Trailwood Realty) about 5 years ago

Hey, Andrea!  I included this post in today's Last Week's Favorites.

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) about 5 years ago


I had a cash deal with BOA and it took 3 months to approve!  CASH! 

Unbelievable.  They want to deny everything on a technicality if nothing else.

Do they make more money on the foreclosure?

My heart goes out to your clients.  So sad.

Ann Hayden in Wildwood, MO


Posted by Ann Hayden, (Berkshire Hathaway HomeServices Select Properties-St. Louis Missouri) about 5 years ago

Hello Andrea,

I washed my hands of BOA years ago and will not deal with them again after doing through a nightmare very similar to the one you have written here.  The big banks do better milking the system than working with their clients, so that is what they do.  

Posted by Lisa Von Domek, ....Experience Isn't Expensive.... It's Priceless! (Lisa Von Domek Team) about 5 years ago

It's a shame that they have strict criteria and make it a point to NOT help the homeowner. WHAT IS THE REASON FOR THIS?  Good luck Andrea...your client deserves better service from the lender on the other side.

Posted by Celeste "SALLY" Cheeseman, (RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE (Liberty Homes) about 5 years ago

Update to all, I thought we were back on track, I got a call that said we were, that I was back in Equator, assigned a new negotiator, on and on. So far, just not true. I am not back in Equator.... so I will be back on the phone yet again today. 

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) about 5 years ago

I truly feel for you!  I know the pain and frustration you're going through, I will be glad when Short Sales are all over!  Seems like the banks would make it a bit easier, especially when you have a willing, ready buyer.  Seems like they do their own thing and they're not even sure what that thing is!  

Posted by Graziella Bruner, Associate Broker - Serving Wayne & Oakland County (NCS Premier Real Estate) about 5 years ago

If you want to sell your house but it's worth less than the amount remaining on the mortgage, a short sale may allow you to sell your house and settle your mortgage debt. By completing a short sale rather than allowing your house to go through foreclosure, you avoid eviction and your house won't be sold at a public sale or auction. Plus, depending on your circumstances, you could qualify for financial assistance to help with relocation costs.

Posted by Jenna Carlson over 4 years ago

I am really impressed with your writing talents as well as with the format for your blog. Is that this a paid subject matter or did you customize it your self? Either way stay up the nice quality writing, it is rare to see a great blog like this one today..

Posted by Mee Longknife about 4 years ago