We urge the Justice Department to investigate Bank of America for its actions during this housing crisis.

Feds must probe banks further over mortgage crisis
Feds must probe banks further over mortgage crisis
03/21/11
PRINT E-MAIL SHARE COMMENTS (7) FONT | SIZE:

0mails last week that purportedly show mortgage document fraud at Bank of America.

Many people yawned. After all, there have been well-documented cases of mortgage fraud and illegal foreclosures, and little has been done to punish Bank of America or any of the banks for their behavior.

But just because the federal government has been slow to act on the mortgage crisis doesn't mean that these e-mails are any less valuable. We urge the Justice Department to investigate Bank of America for its actions during this housing crisis.

The e-mails are a chain showing requests for Balboa Insurance employees to remove document tracking numbers from the system of record. Balboa Insurance became a division of Bank of America after the bank bought the bankrupt home loan company Countrywide Financial.

The idea suggested in the e-mails was to misplace individual documents away from matching loans. This would make it harder for federal auditors to investigate individual loans.

It would also make it far more difficult for individual homeowners to dispute or question bank action on their loans - and therefore obtain mortgage modifications or a stay on bank foreclosure.

There has been clear evidence that banks mishandled their foreclosure processes. All 50 state attorneys general investigated the banks and halted foreclosures for months. They reached a preliminary settlement with the banks this month. The banks are set to pay $20 billion for their shoddy practices and negligence.

Given this backdrop, the Anonymous e-mails are serious indeed. They're a snapshot into why the mortgage mess spiraled out of control. While they don't tell the whole story, they point to the need for further investigation and possible action on behalf of the federal government.

They may also point to the need for further investigation before that preliminary settlement is finalized. If there's evidence that Bank of America not only had shoddy foreclosure practices but also purposely lied to the federal government and individual homeowners, we believe that merits consideration as to the amount of fines it has to pay.

The Anonymous e-mails offer only a limited picture of Bank of America's practices, and ultimately they raise questions instead of offering answers. But those are questions that the Justice Department should be investigating. When people are losing their homes, the banks shouldn't be allowed to get away with deception.

This article appeared on page A - 11 of the San Francisco Chronicle