Published: April 2019

Flawed HUD report lets Bank of America off the hook for possible lending violations

Consumer Action joined a group letter to the Department of Housing and Urban Development (HUD) to express serious concerns regarding a recent flawed report that incorrectly concluded that Bank of America complied with HUD rules prior to selling defaulted loans through its Distressed Asset Stabilization Program. The report relied on an inadequate sampling of loans, relied completely on Bank of America’s files, and did not include critical input from U.S. Federal Housing Administration (FHA) insured borrowers.

In its report, the Department of Housing and Urban Development (HUD) and the Office of the Inspector General for HUD concludes that there were no problems in Bank of America’s servicing of over 47,000 loans that were eventually sold through the Distressed Asset Stabilization Program (DASP). It bases this conclusion on review of only ten loan files. HUD OIG admits that this is a “non-statistical” sample, yet, from these ten loans, it makes a broad conclusion about Bank of America’s performance. The report relied on flawed methodology, ignored important input from Federal Housing Administration (FHA) insured borrowers, and misstates basic requirements for FHA-insured loans. HUD OIG should immediately rescind the report and properly review Bank of America’s performance. An inaccurate view of mortgage servicer performance, like Bank of America, clouds the debate regarding the need for future sales and the risk of selling notes where the loan is still being processed through loss mitigation.

Other Organizations

Advocates for Basic Legal Equality | Americans for Financial Reform Education Fund | Community Legal Services of Philadelphia | Connecticut Fair Housing Center | Consumer Action | Housing and Economic Rights Advocates (HERA) | Legal Aid Society of Southwest Ohio | Legal Aid Society of the District of Columbia | Mobilization for Justice | Mountain State Justice, Inc. | National Consumer Law Center (on behalf of its low-income clients) | National Fair Housing Alliance | National Housing Law Project | North Carolina Justice Center | Ohio Poverty Law Center

More Information

For more information, please visit NCLC's website.

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Flawed HUD report lets Bank of America off the hook for possible lending violations   (Letter_Response_OIG_DASP_042919.pdf)

 

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