Congressman Frank Pallone, Jr., Thursday requested New Jersey Attorney General Paula T. Dow investigate allegations against Bank of America in response to constituent complaints about questionable lending practices resulting in consumer home foreclosures and increased debt burdens. Recently, Pallone's constituents have reported many instances of being misled and misinformed by Bank of America regarding their loan and chances for modification.
"Predatory lending has had devastating effects on families' lives and I urge the Attorney General to act quickly on this investigation to prevent more people from suffering from these practices," said Pallone. "These lending abuses have made it harder for families to purchase daily necessities, pay their bills, utilize credit and have even forced them out of their own homes. Especially in an economy where families are already struggling financially, it's important to prevent these rampant abuses by big banks."
Lawsuits against Bank of America are pending in Arizona and Nevada on charges of misleading and misinforming customers, as well as a multi-state lawsuit led by Iowa Attorney General Tom Miller.
The text of the letter appears below.
January 6, 2010
Attorney General Paula T. Dow
Richard J. Hughes Justice Complex
8th Floor, West Wing
25 Market Street
Trenton, NJ 08625-0080
Attorney General Dow,
I am writing to ask that you open an investigation into Bank of America in order to protect New Jersey homeowners.
My district offices have received many complaints from constituents who have had problems obtaining loan modifications and who felt as if they were also misled and misinformed by Bank of America regarding their loan and their realistic chances for modification. As of July 2010, almost 5,000 homes in New Jersey had been foreclosed upon. This large number begs the question of how many foreclosures could have been avoided were lenders like Bank of America acting forthrightly with their customers.
Bank of America is being charged by several states, most recently Arizona and Nevada, for being a predatory lender and misleading their customers in search of loan modifications. These practices have resulted in extra penalty fees, increased debt, and foreclosure for many Americans. Customers were misled to believe they needed to be in default in order to qualify for loan modifications. Many were assured they qualified for a loan modification, only to be told days or weeks later that they were ultimately denied. Lawsuits filed in Arizona and Nevada also allege that Bank of America falsified reasons to deny customers loan modifications. In addition to the lawsuits being pursued by Arizona and Nevada, there is simultaneously a multi-state investigation into Bank of America's actions being led by Iowa Attorney General Tom Miller.
The 111th Congress spent the last two years fighting abusive lending practices perpetrated by Big Banks. We fought hard to keep working families in their homes amidst a housing crisis, all due to the irresponsibility of lenders and banks. My constituents, and many Americans, have seen their lives destroyed by Bank of America and others banks' questionable practices.
It is my hope that your investigation will result in helping these customers keep their homes and prevent loss of home for customers in the future. Meanwhile, I will continue to work on the federal level to stop these egregious acts by lenders that only serve to hurt the customer and my constituents.
If you have any questions, please contact Stephanie Albanese in my office at (202) 225 4671 or at Stephanie.firstname.lastname@example.org. Thank you for your prompt attention to this matter.
FRANK PALLONE, JR.
Member of Congress