A lawsuit filed by the state of Arizona is turning ugly for Bank of America.
Back in December, Bank of America was sued by Arizona over mortgage modification programs intended to keep Countrywide borrowers out of foreclosure. Arizona accused the bank of pursuing foreclosures even while requests for modifications were pending.
Now a damning accusation by a U.S. Department of Housing and Urban Development’s inspector general has been filed as an exhibit in that lawsuit. The report says that Bank of America "significantly hindered" a federal review of its foreclosure practices.
“Our review was significantly hindered by Bank of America’s reluctance to allow us to interview employees or provide data and information in a timely manner,” said William Nixon, an assistant regional inspector general for HUD.
The declaration was dated June 1 and reportedly filed on June 8. (Read the filings here.)
The inspector general for HUD has been investigating Bank of America’s foreclosure practices on what may be billions of dollars worth of taxpayer-backed loans. From October 2008 to September 2010, Bank of America submitted 40,219 claims on loans backed by Federal Housing Authority. The bank said it was owed $5.7 billion in taxpayer cash.
Nixon’s team was assigned to investigate the bank’s claims.
News of the confidential investigation into FHA claims was first broken by Shahein Nasiripour of the Huffington Post way back in May.
JPMorgan Chase , Wells Fargo , Citigroup and Ally Financial were also investigated, according to the Huffington Post.
It’s not clear why the results of these investigations remain confidential. If HUD’s inspectors are finding fraud on taxpayers by the banks, the public needs to know.
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