Are Friends of Angelo Still Receiving Perks From Bank of America?

Steve Dibert, MFI-Miami

While driving to Miami last week, I began receiving phone calls from homeowners telling me they were receiving calls from Bank of America trying to convince them to modify their loan.

At first, I thought nothing of it until multiple homeowners began telling me the same thing.   They had high income levels, were current on their payments, had fixed rate mortgages, had low loan-to-values and low debt ratios.   These clients, by their own admission were quite able to keep paying their payments and could ride out the recession.   These homeowners also told me they didn’t just receive one call they received several calls and with each call the salesperson would become more and more aggressive.

As you can guess, these were not your average homeowners who contacted me.  They were successful people from different professions with multi-million dollar homes.  Several of these people had even received very lucrative deals from Countrywide during the reign of Angelo Mozilo.

Later in the week, as I was sitting poolside drinking my Mojito trying to pick up this beautiful Canadian tourist, I get a call from Richard Zombeck, a blogger from the Huffington Post and Shame the Banks (www.shamethebanks.org) who asks me if I know anything about Bank of America offering modifications to financially secure clients because he had received several phone calls from homeowners telling him the same thing.  As we compare notes, we agree something doesn’t sound right.

The next day, I began thinking about this and realized Richard and I may be on to something.  Since starting MFI-Miami, I rediscovered something I learned working in politics many years ago, there is no such thing as a coincidence.  I also discovered these mega-banks don’t wipe their backsides without a plan.  Everything is methodically thought out and decided in a hybrid Sun Tzu/Machiavellian way and very few things are left to chance.

So what is Bank of America up to? It appears they are offering lucrative loan modifications to homeowners who were on Countrywide’s old Friends of Angelo list in order to artificially inflate their numbers of successful modifications and as political favors to influential policy makers in Washington.  This is probably to get consumer groups and policy makers in Washington off their back because the last thing Bank of America needs is to become someone’s campaign issue in the upcoming November election.

This also raises another serious issue.  If this is what Bank of America is doing, are they also not reporting the modifications to the credit bureaus, thus making the homeowner exempt from the 100 plus point hit to their credit scores?