Former Bank of America employees say in court documents that the bank routinely lies to customers about their mortgages, and denies their requests for modifications without even looking at the paperwork.

In sworn affidavits, four former employees, for example, describe policies in place at the bank that they say are designed to subvert the Home Affordable Modification Program (HAMP), 2009 government-sponsored initiative that was designed to keep distressed homeowners above water during the depths of the housing crisis.

The affidavits are part of multiple court cases against the bank brought by homeowners who say they were unfairly foreclosed upon. One case is underway in the U.S. District Court of Massachusetts, before Judge Rya W. Zobel. A movement is underway to unite the cases under a single class-action lawsuit.

'During a blitz, a single team would decline between 600 and 1,500 modification files at a time for no reason other than that the documents were more than 60 days old.' —William Wilson, former Bank of America worker

Bank of America, based in North Carolina, is disputing the allegations.

The former workers allege there's a bank-wide policy that encourages mortgage officers to delay and avoid that process as much as possible, to foreclose on customers who shouldn’t have been, and to generally lie and mislead.

According to one affidavit, a mortgage processor who put 10 or more houses into foreclosure in any given month was eligible for a $500 cash bonus, or gift cards at a major retailer.

The sworn affidavits were made public recently on the website of ProPublica, an independent, non-profit news service that produces investigative journalism in the public interest.

The employees say the bank also went out of its way to mislead, stall and delay paperwork so that customers would be denied changes to their mortgages, and forced into arrangements that were more profitable to the bank than HAMP arrangements were.

"We were told to lie to customers and claim that Bank of America had not received documents it had requested, and that it had not received trial payments [when in fact it had]," said Simone Gordon, a senior collector of loss mitigation at the bank for five years until early 2012.

Another ex-worker, Theresa Terrelonge, agreed that subverting HAMP to the bank’s benefit was an overarching goal for the bank.

"Based on what I observed, Bank of America was trying to prevent as many homeowners as possible from obtaining permanent HAMP loan modifications while leading the public and the government to believe that it was making efforts to comply with HAMP," she said.

Worker alleges needless delays

"It was well known among managers and many employees that the overriding goal was to extend as few HAMP loan modifications to homeowners as possible."

She also said that Bank of America "collectors" who failed to meet their quotas were fired for not putting enough customers into foreclosure. "Several of my colleagues were terminated on that basis," she said.

Another former employee, William Wilson, said the bank would routinely delay filing appropriate paperwork after receiving it, in order to have certain penalties kick in. After waiting 60 days, the bank would automatically reject them all.

"During a blitz, a single team would decline between 600 and 1,500 modification files at a time for no reason other than that the documents were more than 60 days old," Wilson said.

"Once an applicant was finally rejected after a long delay, the bank would offer them an alternative. Bank of America would charge a higher interest rate, ranging up to as compared to the two per cent if the loan had been modified under HAMP."

Wilson alleges he was fired in August 2012 for refusing to go along with the scheme any longer.

Lawyers painting 'false picture,' bank says

The employees allege the bank would routinely file false paperwork to government suggesting it had far more HAMP-backed loans on its books than was the reality.

"It was well known among Bank of America employees that the numbers Bank of America was reporting to the government and to the public were simply not true," Steven Cupples said. Cupples worked at the bank until June 2012. He previously worked at Countrywide, the lender at the centre of America’s subprime mortgage crisis that was subsequently taken over by Bank of America

For its part, the bank denies the allegations.

"We continue to demonstrate our commitment to assisting customers who are at risk of foreclosure and, at best, these attorneys are painting a false picture of the bank's practices and the dedication of our employees," a spokesman for the bank told Reuters news agency, adding the declarations were "rife with factual inaccuracies."