BofA Allegedly Modified Mortgages To Keep Complainers Quiet
The latest accusations against BofA stem from a 2010 lawsuit over BofA's loan-modification practices. After taking control of Countrywide Financial in 2008, BofA allegedly misled borrowers about the circumstances under which they could qualify for loan modifications, according to Bloomberg Businessweek.
A probe into the matter led by Arizona attorney general Thomas Horne turned up a dozen cases in which BofA appears to have waived borrowers' debts, paid their legal fees or modified their mortgages -- but only if the borrowers agreed not to make statements "that defame, disparage or in any way criticize" BofA, and furthermore agreed to "remove and delete any online statements" about the issue, including "postings on Facebook, Twitter and similar websites," according to court documents.
This isn't the first time BofA has faced court claims over its loan modification practices. In August, the state of Nevada brought a comprehensive lawsuit against BofA that accused the bank of misleading homeowners who sought mortgage modifications, among other allegations of misconduct. In other previous cases, homeowners have accused the bank of reneging on its obligations to borrowers looking to modify their loans.
The specific charges in Arizona come at a moment when BofA is already mired in legal troubles and grappling with poor public relations. In total, BofA paid roughly $14 billion in legal settlements related to mortgage cases last year, though it was still able to turn a $2 billion profit in the final quarter of 2011, according to the Associated Press.
