Countrywide Routinely Destroyed Records It Was Required to Save
Ooops! This is not good:
“Bank of America and Countrywide Home Loans destroyed mortgage documents, and “recreate” them by “insert(ing) data as they see fit,” to cover up their own failure to keep records – or their fraud – according to a federal RICO class action.
“To cover up the servicing mistakes and fraud and misrepresentation in the servicing of a consumer escrow, Defendants ‘recreate’ letters, insert data as they see fit, and fail to produce the entire HUD complaint form. This way, a consumer is left in the dark about the fraud that occurred to them,” the complaint states.
Lead plaintiff Kim Gorham says that when she sent a letter seeking information about her escrow account, she was informed that it had been “destroyed by a letter opener.” She says that getting a “clear and concise” statement from the defendants has been an “impossible task.”
My assumption is this is primarily via Countrywide prior to BofA’s acquisition (anyone know?)
Corporate Ethics: An apparent contradiction in terms . . .
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Source:
Class Claims Lender Destroyed Records
JONATHAN PERLOW
CourtHouse News, October 22, 2009
http://www.courthousenews.com/2009/10/22/Class_Claims_Lender_Destroyed_Records.htm
October 26th, 2009 at 7:04 am
Class Claims Lenders Destroyed Mortgage Records
By JONATHAN PERLOW
ALBANY (CN) – Bank of America and Countrywide Home Loans destroyed mortgage documents, and “recreate” them by “insert(ing) data as they see fit,” to cover up their own failure to keep records – or their fraud – according to a federal RICO class action…
http://livinglies.wordpress.com/2009/10/22/new-shockwaves-from-courts-and-accounting-board/
a re-link to the story linked to in the Post..
Is there, really, zer0 MSM coverage of this?
http://news.google.com/news/search?aq=f&pz=1&cf=all&ned=us&hl=en&q=Countrywide+Home+Loans+RICO
Nice!~
btw, did you see that Game last night?
October 26th, 2009 at 7:07 am
“To cover up the servicing mistakes and fraud and misrepresentation in the servicing of a consumer escrow, Defendants ‘recreate’ letters, insert data as they see fit, and fail to produce the entire HUD complaint form. This way, a consumer is left in the dark about the fraud that occurred to them,” the complaint states.
Since the article states “rountinely destroyed records”,
Who in the company accepted this as part of their “job description”? The firms accountants? Execs? Temps? The Sheep? Or how about one of those community organizations of “youth for hire”?
Hmmm, maybe thats what happened to Sen. Chris Dodd’s mortgage papers! it wasn’t the dog after all.
October 26th, 2009 at 7:22 am
Who in the company accepted this as part of their “job description”?
This behavior was not some due to some rouge individual. Countrywide was not some rouge institution. It was a culture of corruption, systemic in every way. The business process itself relied on the deception and corruption. Countrywide did not represent some sort of anomaly.
October 26th, 2009 at 8:11 am
Apparently, judging from the MERS fiasco, there’s been a lot of sloppy recordkeeping all along the line. Hope to see BankIndia pay the price for being a corporate whore.
October 26th, 2009 at 8:19 am
At what point do we see criminal prosecutions for this massive fraud? Years ago they caught a local lawyer puffing his income for his mortgage and he got criminally prosecuted & convicted, one man, one mortgage. How can we have this happening with thousands or hundreds of thousands of mortgages and nothing? And how about the unanswered issue of double counting mortgages in the tranche slice & dicings?
I have never seen a corporate billing go the wrong way, a missed bill or an underbilling, it’s always duplicate billing/overbilling and then it’s a tug of war and negotiation to get your money back. de facto fraud seems to be limited to individuals, corporations make systemic mistakes, individuals commit fraud
October 26th, 2009 at 8:58 am
. . . if found guilty, Countrywide’s Corporate Charter could spend up to 5 years locked up in a maximum security file cabinet in Leavenworth . . .
Time to do away with the corporate shield.
October 26th, 2009 at 9:07 am
Still nothing about this on the NYTimes website, although the “Dealbook” blog has some boo-hoo about how mean everyone is being to these poor bankers:
http://dealbook.blogs.nytimes.com/2009/10/23/another-view-the-debate-over-vilifying-bankers/
October 26th, 2009 at 9:27 am
Of course this is nothing more than CYA, officially sanctioned criminal behavior until the Congress does its duty where the regulators institutionally have failed categorically and systematically.
October 26th, 2009 at 9:31 am
How did we allow this type of activity to become an accepted practice? Same as with liar loans. Everyone new they were fraud but didn’t care because the responsibility would be shifted of onto some greater fool – eventually to the likes of perhaps a pension fund in a Norwegian village .
It used to be more difficult to engage in fraud. Someone else in the chain would be honest and mess up the plans. But I guess it is hard to catch fraud when nearly everyone thinks it is OK to game the system.
The greater fool is us. The world community is not going to want to do business with a bunch of cheats and crooks., particularly if they are also going broke.
October 26th, 2009 at 9:38 am
If your corporate document retention policy reads:
19.3 Document Retention
If any Countrywide employee finds himself/herself in retention of any documents, s/he shall shred them wit a quickness, forthwith. SHRED SHRED! For the love of all things holy, SHRED!!!!
Then I don’t think there’s a problem from a legal perspective.
October 26th, 2009 at 9:49 am
BR: “Corporate Ethics: An apparent contradiction in terms”
Calling these transgressions “ethics” is offensive. This is not an ethics matter this is a violation of the law to cover up fraud. Calling things for what they really are is the first step to correct the problems. When some one robs a 7eleven nobody says perpetrator has been told that his misappropriation of the 7elev cash is due to ethical oops.
October 26th, 2009 at 9:59 am
People just do what they’re told at companies these days. Anyone who questions too much inside “the corporation” is shown the door pretty quickly. That’s the bottom line. Many just do what they’re told out of fear, some out of apath, and for some the feeling is they work under a “corporation”, so any borderline criminal activity is justified (“not my problem that I’m screwing my neighbor and community, just trying to make a living”) will be protected. Just sad.
October 26th, 2009 at 10:08 am
We had an ongoing investigation at my former employer and we had a light hearted approach “shred it or regret it”.
Very often prosecuters sink their teeth deeper into the coverup than the original action. The SOX regulations make corporate records sacred grounds, with a very broad definition of what a corporate record is (refer ro earlier defintions of “is”) and I am cautiously optimistic that the slow turning wheels of justice will eventually be felt by those who engineered these things not the “letter openers”
October 26th, 2009 at 10:09 am
“It used to be more difficult to engage in fraud.”
it’s not fraud when everyone makes boat loads of money. it’s fraud when things head south. happens with every bubble. it will happen again, you can’t regulate human nature.
October 26th, 2009 at 10:12 am
@Manny: Yep.
Again, it’s the point made in that (very dogmatic) documentary “The Corporation” that for-profit corporations behave sociopathically.
One of the things few people examine is charitable giving. We all know that publicly traded companies have to subordinate charitable giving to profits (thank you, Ford shareholders) but few people look at giving. Some people think dollars spent = effectiveness/measure of the love. Not so.
Corporate giving tends to be like other forms of corporate behavior: short-term and PR-driven. Much money is spent on feel-good ad campaigns to link brand to smiling disabled/minority children. And then there’s the jockeying to support museum and art exhibits (and bricks-and-mortar construction projects) that the poor will never see.
And this is the privately funded “safety net” that a lot of people strongly believe should replace entitlements. Sigh.
October 26th, 2009 at 10:15 am
@Transor: Exactly the point I was trying to make. I got chills up and down my spine (and not in a good way) while watching that film a few years ago.
October 26th, 2009 at 10:23 am
“You’ve reached the corporate document destruction department, all of our shredders are currently busy, we estimate that your original document will be destroyed in approximately 20 minutes and a revised document supporting the bank’s position in the dispute will be express mailed to you withn 48 hours. A $75 fee for this service will be added to your past due balance. All past due balances are subject to a monthly penalty of $100 and 29.99% interest on the entire balance. Thank you for using “Goliath National Bank, the last bank standing”TM
October 26th, 2009 at 10:48 am
Ho hum…a lot of fucking good it does to re-hash Countrywide’s shenanigans. (In no way does this imply I endorse their malevolence.) The rogue (not rouge, but perhaps their ex-executives should be forced to display a scarlet “C” for “Cheat”, or “Countrywide, which should by now be synonymous, on their foreheads) company is now gone, swallowed up in the belly of the BoA leviathan.
The real and ongoing crime in residential real estate is:
1) $1.45 trillion newly-created fed pixels, courtesy of diluted taxpayer dollars, attempting to prevent the residential real estate market from doing what markets do when demand falls (i.e., the price declines). Of that total, $1.25 trillion going to purchase MBS’s, many mortgages of which were undoubtedly originated by the Scarlet “C”.
2) $8,000 of your money being shoved in the faces of potential homebuyers, with plans to double and extend the program. Indefinitely?
These are the forward-looking issues. Worrying about Countrywide, which we know already did some bad things, will not prevent the coming crash in residential real estate when the folks funding this madness finally take a peek behind the curtain.
October 26th, 2009 at 10:52 am
Specific answer to your question: almost certainly pre-dates the B of A acquisition and assertion of operating control, although post-acquisition I’ve seen anecdotal evidence of mis-selling out of former C’wide branches. Even now.
October 26th, 2009 at 12:12 pm
Bof A is the new Butt Boy for C’s crimes. Government loves a deep pocketed “corporate” villain; remember Spitzer’s corporate shakedowns for $100m’s in fines. BofA’s shareholders are next.