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June 15, 2013 10:44 AM Will NSA scandal inadvertently bury alleged BOA foreclosure fraud?

By Samuel Knight

I, for one, have been glued to the news about NSA surveillance, and personally think Glenn Greenwald has done Americans a massive service. We deserve to know what a state of permanent asymmetrical war looks like, particularly considering how federal officials have come to view dissenting voices and journalists since the attacks of September 11, 2001 - which, by the way, could have been foiled without dragnet fishing expeditions.

But the downside to huge stories like these is that other important news often eludes the mainstream discourse (i.e. the Hungarian Revolution, which was overshadowed by the Suez Crisis). This ProPublica story about Bank of America deserves national attention, for example, but I fear it will get lost amid the wealth of scandal wrought, justifiably, by Greenwald’s reporting.

So what did BOA (allegedly) do this time?

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

Goodness. It (allegedly) exposes Lanny Breuer’s statement about fretting over the “huge economic effect” of prosecuting Wall Street as being rotten as all hell - as if it wasn’t already transparently corrupt. Left unsaid by Breuer, there is a “huge economic effect” of failing to bring criminal cases against banking executives for (alleged) foreclosure fraud - the lack of deterrence has undoubtedly encouraged its (alleged) continuance, causing the misery of thousands (if not, millions).

Sometimes, homeowners were simply denied en masse in a procedure called a “blitz,”said William Wilson, Jr., who worked as an underwriter and manager from 2010 until 2012. As part of the modification applications, homeowners were required to send in documents with their financial information. About twice a month, Wilson said, the bank ordered that all files with documentation 60 or more days old simply be denied. “During a blitz, a single team would decline between 600 and 1,500 modification files at a time,” he said in the sworn declaration. To justify the denials, employees produced fictitious reasons, for instance saying the homeowner had not sent in the required documents, when in actuality, they had.

It’s not like this is the first time a bank has been caught (allegedly) doing this sort of thing (read the whole ProPublica story). But the details have emerged as part of civil litigation - “a consolidation of 29 separate suits against the bank from across the country…seeking class action certification.” Which might not have been necessary if the DOJ did its job. How many more of these civil lawsuits will we see before U.S. Attorneys throw execs in the slammer?

Unfortunately, a lot of influential people preoccupied with the surveillance story might not be asking that question.

Samuel Knight is a freelance journalist living in DC and a former intern at the Washington Monthly.

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