Bank of America is continuing to be remarkably thin-skinned. Of course, when experiences like Kaili Joy Gray's
go public, they look really bad. Just as bad, in fact, as they actually are.
Now, thanks to investigators in Arizona, we know how Bank of America is dealing with that kind of public airing of grievances by their customers, at least on the mortgage side of their business. They're bribing them with "cash payments and loan relief" as long as they "agree to keep them secret and not criticize the bank." Those agreements to keep the settlements secret is impeding Arizona's investigation into BoA's loan modification practices. The state has filed suit, asking a state court to block these parts of the settlements.
One 2011 accord involving a borrower facing foreclosure who defaulted on a $253,142 mortgage included a $5,000 payment, plus $7,500 for legal fees, and the defaulted payments were waived and the loan was modified to a 40-year term with a 2 percent interest rate, court documents show. The terms of the original loan and the borrower’s complaint about the lender weren’t described in the documents.
The borrower “will remove and delete any online statements regarding this dispute, including, without limitation, postings on Facebook, Twitter and similar websites,” and not make any statements “that defame, disparage or in any way criticize” the bank’s reputation, practices or conduct, according to documents filed in state court in Phoenix. The borrower’s name and address were redacted. [...]
“These agreements have completely silenced even the most communicative consumers,” [Assistant Attorney General Carolyn] Matthews said in the filing. “The settlement agreement purposefully makes it impossible, legally and practically, for a consumer signing it to come forward, voluntarily and promptly, to provide evidence in this case.”
So this action by BoA goes beyond just trying to avoid bad PR and is skating the border of obstruction, since the borrowers are bound to secrecy and can't cooperate with investigators.
Matthews is asking the court to order Bank of America to release the borrowers from the non-disclosure agreement and tell them they will not be held to the confidentiality and non-disparagement provisions of their settlements. The hearing is set for February 1.