DETROIT – The willful wrongdoings of Bank of America were “put on trial” here earlier this week. On the sidewalk outside BoA’s Detroit headquarters, actors portraying former bank employees presented damning evidence that that Bank of America was guilty of delaying and denying home modification loans and was a major cause of Detroit’s financial problems and foreclosure crisis.
The jury was composed of 200 housing and labor activists and the witnesses against BoA were actors playing parts. But the testimony was real. It was drawn from a recent class action lawsuit filed in a Massachusetts federal court. The lawsuit charged that the bank had required employees to lie, falsify records, and more – or rewarded those who did so – in order to deny borrowers loan modifications they were legally entitled to.
Chris Michalakis, president of the Metro Detroit AFL-CIO, said BoA played a big role in undermining the city’s finances. “When you foreclosure on loans, property values decrease, hardworking Detroiters are out of homes, revenue to the city dries up and it’s hard for the city to stay afloat,” he said.
An estimated 45,000 foreclosed homes remain vacant in Detroit, representing an annual loss of $135 million in property taxes.
The city itself was swindled by BoA and other banks according to Detroit Eviction Defense leader Steve Babson. The city borrowed money from banks to cover deficits and got caught in a casino-like bet on interest rates, he said. Detroit bet the rates would go up, BoA and other banks bet they would go down. When they did go down, banks added hundreds of millions in profits, Babson said.
Testimony at the Aug. 19 sidewalk “trial” was based on federal affidavits filed in the lawsuit which said Bank of America modification and foreclosure specialists were given bonuses and gift cards for placing 10 or more accounts in foreclosure a month.
They were told to deny receiving loan modification paperwork from homeowners even when it had been received in a timely fashion. People entitled to low-cost mortgage modifications were forced to accept expensive ones.
Why did the bank employees go along? BoA North Carolina employee William E Wilson supervised a team of 13 employees doing loan modifications. Testimony from an actor playing Wilson said that employees were subject to discipline and firing if they didn’t produce results.
Joining the noontime rally were Summer of Solidarity union activists, many of them from the Steelworkers union. Mike Zielinski, from the Steelworkers, said what is happening in Detroit is a coast-to-coast problem. The group is participating in 32 actions across the nation that started in Philadelphia and will end in Los Angeles on Labor Day.
Detroit is under siege from toxic lending, subprime loans, and illegal foreclosures and on top of that the banks that caused the crisis get bailed out by the taxpayer, Zielinski said. “We’re here to say enough!”
Photo: A Detroit citizen jury indicts Bank of America and “Count Bankula,” Aug. 19. John Rummel/PW
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