Seven months after Connecticut Citizens Action Group kicked off a statewide campaign against the nation's largest financial institution, Bank of America announced it would open a Customer Assistance Center to help struggling homeowners.
In May, the Attorney General's office joined the fight when George Jepsen sent a letter to Bank of America president Brian Moynihan "on behalf of the thousands of distressed Connecticut borrowers who continue to experience significant difficulties due to Bank of America's failure to devote adequate resources to loss mitigation."
Last week, the Attorney General's office praised Bank of America for finally doing the right thing. Critics of the bank, however, say the bank should have taken steps to help distressed homeowners long ago.
AG spokesperson Susan Kinsman says the opening of the center addresses a myriad of complaints from Connecticut customers. She says she hopes the center will address complaints filed with the state Department of Banking. Customers struggling to pay mortgages often ran up against a system not designed to meet their needs, Kinsman says.
Among the complaints: that the bank lost people's paperwork, causing delays that could be the difference between a house-saving loan modification approval and a foreclosure notice.
"This happened more than once," Kinsman says. "Also, there was a lack of communication from the bank explaining what the process would be to get a loan modification. Or when they got info, they sometimes got conflicting or contradictory information. There was no uniform response."
In some instances, Connecticut homeowners defaulted on their mortgages. Kinsman added: "The longer you wait, if you know you are having trouble paying your loan, maybe you fall behind on your payments, maybe you fall into default, and you can receive a foreclosure notice."
In one instance, the bank failed to honor a loan modification it already agreed to, Kinsman says. She attributed that to the fact that there was no single entity to turn to
The bank failed to honor a loan mod the bank already agreed to, and there was no single person the customer can call who was familiar with their file.
Bank of America spokesman TJ Crawford says the center will have a staff of five "home retention specialists."
"It's all about making ourselves even more available to customers," Crawford says, adding there are about 40 similar centers spread out across the country.
Matt O'Connor is a spokesman for the Service Employees International Union and the Connecticut Citizens Action Group. While he says the bank is doing the right thing by putting resources into helping distressed borrowers, he questions the bank's motivations.
"The lack of responsible business practices on the part of Bank of America since 2008 should give anyone reason to doubt their ability to meet the needs of customers in distress. Bottom line, they are opening up a customer service center, that's fine, but it is something they should have done a long time ago," O'Connor says. "Our fear is that it's not going to be the vehicle for change that some people think it is. They still have a long way to go to reverse the damage to the economy that's they had a role in creating."
O'Connor adds there is already a federally funded program, known as Home Affordable Modification Program (HAMP), which BOA does not participate in.
"My concern is that this might be another way for them to avoid participating in the federally funded foreclosure program. That would be fine if they had a decent record for modifying mortgages, but they don't," O'Connor says. "It's not as though Bank of America is going out of their way to help homeowners in distress. Not only are they not participating in the federally funded program, but they're not stepping up and offering an alternative for homeowners who are underwater and in the process of losing their homes."