by Paul Kiel, ProPublica

Bank of America employees regularly lied to homeowners seeking loan modifications, denied their applications for made-up reasons, and were rewarded for sending homeowners to foreclosure, according to sworn statements by former bank employees.

The employee statements were filed late last week in federal court in Boston as part of a multi-state class action suit brought on behalf of homeowners who sought to avoid foreclosure through the government's Home Affordable Modification Program (HAMP) but say they had their cases botched by Bank of America.

In a statement, a Bank of America spokesman said that each of the former employees' statements is "rife with factual inaccuracies" and that the bank will respond more fully in court next month. He said that Bank of America had modified more loans than any other bank and continues to "demonstrate our commitment to assisting customers who are at risk of foreclosure."

Six of the former employees worked for the bank, while one worked for a contractor. They range from former managers to front-line employees, and all dealt with homeowners seeking to avoid foreclosure through the government's program.

When the Obama administration launched HAMP in 2009, Bank of America was by far the largest mortgage servicer in the program. It had twice as many loans eligible as the next largest bank. The former employees say that, in response to this crush of struggling homeowners, the bank often misled them and denied applications for bogus reasons.

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Pulitzer Prize-winning New York Times columnist Gretchen Morgenson tells Bill Moyers that, five years after the country’s economic near-collapse, banks are still too big to fail, too big to manage, and too big to trust. Stockholders’ reaffirmation of Jamie Dimon as JP Morgan Chase’s chairman and CEO this week — despite a year of accusations and investigations at the bank — is further evidence, she says, of an unchecked system that continues to covet profits and eschew accountability, putting our economy and democracy at risk. Morgenson also discusses how behemoth companies like Apple manipulate the system and avail themselves of the biggest tax loopholes money and influence can buy.

“These banks are not getting smaller; they’re getting larger. There are now more too-big-to-fail institutions than there were prior to the 2008 crisis,” Morgenson tells Bill.

And while the Dodd-Frank Act was supposed to prevent that from happening, Morgenson says the law itself is less powerful than those it hopes to regulate.

“Dodd-Frank set up a system to unwind troubled institutions when they become troubled. But it requires regulators taking a really firm stand against large, politically-interconnected, and powerful companies… I just think it’s too easy to put the taxpayer on the hook and bail these people out. So of course the response from these people is going to be, I’ll just do it bigger next time, the taxpayer will be there to bail me out, and we’ll go on our merry way.”

Full transcript below the fold...

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America is in the grip of a societal economic panic. Lawmakers cry “We’re broke!” as they slash budgets, lay off schoolteachers, police and firefighters, crumbling our country’s social fabric and leaving many Americans scrambling to survive. Meanwhile, multi-billion-dollar American corporations like Exxon, Google and Bank of America are making record profits. And while the deficit climbs and the cuts go deeper, these corporations -- with intimate ties to our political leaders -- are concealing colossal profits overseas to avoid paying U.S. income tax.

"We're Not Broke" is the story of how American corporations have been able to hide over a trillion dollars from Uncle Sam, and how seven fed-up Americans from across the country, take their frustration to the streets and vow to make the corporations pay their fair share.

More here.

Posted to Youtube by Twitter user @SusanB26, she recalls from painful personal experience how she learned about bank fraud. Perhaps her sharing this information can be of help to someone else.

Senator Bernie Sanders:

When the greed, recklessness, and illegal behavior on Wall Street drove this country into the deepest recession since the 1930s, the largest financial institutions in the United States took every advantage of being American. They just loved their country - and the willingness of the American people to provide them with the largest bailout in world history. In 2008, Congress approved a $700 billion gift to Wall Street. Another $16 trillion in virtually zero interest loans and other financial assistance came from the Federal Reserve. America. What a great country.

But just two years later, as soon as these giant financial institutions started making record-breaking profits again, they suddenly lost their love for their native country. At a time when the nation was suffering from a huge deficit, largely created by the recession that Wall Street caused, the major financial institutions did everything they could to avoid paying American taxes by establishing shell corporations in the Cayman Islands and other tax havens.

In 2010, Bank of America set up more than 200 subsidiaries in the Cayman Islands (which has a corporate tax rate of 0.0 percent) to avoid paying U.S. taxes. It worked. Not only did Bank of America pay nothing in federal income taxes, but it received a rebate from the IRS worth $1.9 billion that year. They are not alone. In 2010, JP Morgan Chase operated 83 subsidiaries incorporated in offshore tax havens to avoid paying some $4.9 billion in U.S. taxes. That same year Goldman Sachs operated 39 subsidiaries in offshore tax havens to avoid an estimated $3.3 billion in U.S. taxes. Citigroup has paid no federal income taxes for the last four years after receiving a total of $2.5 trillion in financial assistance from the Federal Reserve during the financial crisis.

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Some of Bank of America's 40 million customers "were unable to access their online banking accounts, mobile payment systems or the company’s telephone call centers on Friday," reports the NYT. An internal breakdown, rather than a hacking attack, is suspected, but the bank continues to investigate.

More from Reuters:

Since last fall, U.S. bank websites have faced a blitz of "denial of service" attacks in which hacker activists disrupt operations by flooding them with information.

Customers logging into Bank of America's website on Friday received a message that said the site was "temporarily unavailable." Some customers took to Twitter to vent their frustrations.

Until...Twitter came under attack!

In a blog post titled "Keeping Our Users Secure" from Bob Lord, Twitter's Director of Information Security:

As you may have read, there’s been a recent uptick in large-scale security attacks aimed at U.S. technology and media companies. Within the last two weeks, the New York Times and Wall Street Journal have chronicled breaches of their systems, and Apple and Mozilla have turned off Java by default in their browsers.

This week, we detected unusual access patterns that led to us identifying unauthorized access attempts to Twitter user data. We discovered one live attack and were able to shut it down in process moments later. However, our investigation has thus far indicated that the attackers may have had access to limited user information – usernames, email addresses, session tokens and encrypted/salted versions of passwords – for approximately 250,000 users.
...
We also echo the advisory from the U.S. Department of Homeland Security and security experts to encourage users to disable Java on their computers in their browsers. For instructions on how to disable Java, read this recent Slate article.

This attack was not the work of amateurs, and we do not believe it was an isolated incident. The attackers were extremely sophisticated, and we believe other companies and organizations have also been recently similarly attacked. For that reason we felt that it was important to publicize this attack while we still gather information, and we are helping government and federal law enforcement in their effort to find and prosecute these attackers to make the Internet safer for all users.

More than 75 workers and retirees -- with police in tow -- descended on Bank of America's headquarters in Boston to call out their "Fix the Debt" friends for what they really are: Gold Diggers. Check out the great flashmob video above.

You may have seen their ads on TV or been accosted by a Fix the Debt canvasser on the street, they claim to be a grassroots effort promoting steps to reduce the national debt. But the truth is, Fix the Debt is just another corporate-financed DC lobbying group looking for taxpayer handouts.

That revelation prompted a MassUniting.org flashmob-style demonstration Wednesday outside the New England headquarters of a major Fix the Debt funder and beneficiary, Bank of America:

The action comes on the heels of a report from the non-partisan Institute for Policy Studies (IPS), which reveals that Fix the Debt’s legislative agenda has little to do with the national debt at all. In fact, the bulk of the group’s lobbying activities have focused on securing billions in new corporate tax breaks at the expense of American workers and seniors.

Make no mistake, Fix the Debt does support cuts to Social Security and other vital programs – as well as raising the retirement age – as a way to reduce federal spending, But according to the IPS report, Fix the Debt plans to use those savings to fund more than $134 billion in tax giveaways for its 63 publicly-held member corporations -- including Bank of America, Verizon and General Electric. Keep in mind, 24 of these Fix the Debt companies already pay their CEOs more than they paid in federal corporate income taxes. Twenty-two spent more on lobbying than they did on their tax bill.

So much for “fixing the debt.” As it turns out, the corporate-financed Fix the Debt campaign amounts to old school gold digging at its worst. Might want to mind your pocketbook.

For more information about MassUniting, or to sign up to help, visit their website here.

View more videos at: http://nbclosangeles.com.

A bastion of the contemporary Occupy movement is no more. A foreclosed house dubbed Fort Hernandez was cleared out by sheriff's deputies early this morning, observers report.

The eviction after a four-month sit-in at the Hernandez family home in Van Nuys was reported about 4:30 a.m. The eviction of 18 people, including four to six family members and 12 occupiers, and 5 dogs went smoothly, with no arrests or injuries.

The L.A. County Sheriff’s Department carried out the eviction with armored vehicles and nearly 100 police personnel.

Dump trucks were brought in to break down the encampment.

“They were living in tents and hadn’t paid the mortgage for about 4 years,” according to L.A. Co. Sheriff’s spokesman Steve Whitmore.

Occupiers fed up with big-bank foreclosures, particularly in light of the federal bailout in 2008, upheld Fort Hernandez as a symbol since late August.

They say there are more empty homes in the same Van Nuys neighborhood than there are homeless.

A Bank of America spokesperson said, “We have made multiple attempts to offer Mr. Hernandez assistance since he stopped making payments in 2008. Prior to foreclosure, we requested financial documents over a 6-month period, but Mr. Hernandez never submitted the necessary documentation for us to complete our review.”

Hernandez said his only hope is to fight the bank in court.

By Paul Kiel, ProPublica, Dec. 17, 2012

The Independent Foreclosure Review is the government's main effort to compensate homeowners for harm they suffered at the hands of banks — and, as its name indicates, it's supposed to be independent.

But until recently, that was hardly the case with Bank of America. Supposedly independent, third-party reviewers would sit at a computer, analyzing each homeowner's case by going through hundreds of questions, such as whether the bank had properly reviewed a homeowner for a modification or had charged bogus fees. But the reviewers weren't starting from a blank slate. Bank of America employees had already supplied the answers, which the reviewers would have to override if they did not agree.

No evidence has emerged that Bank of America pressured reviewers to accept its answers, and the bank did not supply answers for the final questions: whether the bank should pay compensation and, if so, how much. But those ultimate determinations depended on responses to the preceding questions, and for reviewers the path of least effort was to accept the bank's answers.

This practice only ended a month after ProPublica published a story showing that Bank of America was doing much of the work itself. When that story was published, ProPublica hadn't yet learned that the answers the bank supplied showed up on the reviewers' computer screens as defaults, and Bank of America strenuously denied that it had compromised the integrity of the review. Since November, the reviewers now begin their analysis without the bank's answers.

Bank of America spokesman Dan Frahm confirmed the change: "Steps were taken" so that the independent reviewer, Promontory Financial Group, "could not view answers supplied by the Bank of America Claim Researcher."

Frahm maintained, however, that the change didn't mean the reviews completed under the prior system were tainted. Promontory's employees have always had the ability to "override any answer supplied by the Bank of America Claim Researcher," he said.

Advocates for homeowners aren't convinced. "It's hard to imagine" that Promontory's reviewers weren't influenced by having the bank's answers right in front of them, said Alys Cohen of the National Consumer Law Center. "As a result it seems obvious that the earlier reviews should be re-reviewed."

Potential Conflict of Interest

The Independent Foreclosure Review is the government's largest program to compensate victims of the banks' foreclosure abuses. 4.4 million homeowners are eligible, but homeowners must submit a claim to ensure they're covered by the review. As of the end of November, only 315,000 homeowners had done so, according to regulators, a low response rate of about seven percent.

Victims could receive up to $125,000 in cash compensation or, if possible, get their home back. The review is overseen by the nation's bank regulators, who were spurred to action in 2011 by the robo-signing scandal.

The review has been dogged by criticism since the outset, partly because of how it works. Banks hire and pay consultants to be the independent, third-party reviewers. Bank regulators must approve them, which the regulators say ensures the independence of the review. But critics argue that the consulting firms have other contracts with the banks and so have a conflict of interest: If the consultants anger the banks, they may lose future business.

For its "independent consultant," Bank of America hired Promontory. Promontory is also conducting the review for Wells Fargo, which has the second largest number of loans eligible for review (about 933,000) after Bank of America (1.3 million) of all the banks.

"A Technical Change"

As ProPublica reported in October, all four of the country's largest banks planned to participate heavily in evaluating whether homeowners were harmed, according to their contracts with the consultants. Of course, homeowners claiming their bank abused them were never told the same bank would be integrally involved in the review.

In October, ProPublica uncovered internal Bank of America memos and emails indicating that, while Promontory made the ultimate decision as to a homeowner's compensation, the bank was doing much of the review work itself.

When ProPublica first presented this evidence to Promontory, Bank of America, and the bank's primary regulator, the Office of the Comptroller of the Currency, all three initially denied that Promontory was using analysis performed by the bank's own employees.

Now, even as Promontory and Bank of America confirmed they had changed their system to make the bank's analysis invisible to Promontory's reviewers, both companies insisted that the independence of the reviews had never been compromised.

"Promontory resources have always reviewed the files, performed all tests, and reached independent conclusions, without input or influence from Bank of America," said Promontory spokeswoman Debra Cope. "A technical change was made in November with respect to the visibility of information uploaded by Bank of America file preparers.... Although these responses were previously visible to Promontory reviewers, they never had any bearing on Promontory's independent testing processes."

OCC spokesman Bryan Hubbard said the OCC has a policy of not commenting on specific institutions, but added, "as we have stressed before, the OCC expects the independent consultants to exercise their independence in reviewing and evaluating each file. Our examiners are ensuring that occurs."

The NCLC's Cohen said the core problem with the Independent Foreclosure Review is that it is largely being handled in secret.

"At the end of the day, if the regulators and servicers want to put this behind them, they need the public to believe this is legitimate. Without transparency, you can't have real accountability."

This video is from a Nov. 9th, 2012 march by hundreds of supporters on several banks in Los Angeles (including Deutsche Bank, as well as Wells Fargo, BNY Mellon, and Bank of America) to protest illegal foreclosures, the banks' greed, and a corrupt system built to enrich the wealth of a few at the expense of the 99%. The video features interviews and speeches from Occupy activists from southern California, and members of other groups including Occupy The Hood, the American Indian Movement, and LA residents facing foreclosure and homelessness.