Bad Banking

I came across this article today in the Wall Street Journal about Bank of America harassing debtors in bankruptcy and it got me thinking. In my line of work I deal with dozens of banks, some are easy to deal with, some are difficult, and then there is Bank of America. If you have a mortgage owned by Bank of America, may God have mercy on your soul, because Bank of America sure won’t. The biggest misconception most of my clients have about banks is that they act rationally — they do not.

I cannot begin to tell you how many times I have had clients with money trying to pay their mortgage, and they are declined. Below is a true example of a time where I was dumbfounded by this bank:

I had a client whose home was foreclosed upon despite his best efforts to work with Bank of America. Fortuitously, he inherited quite a bit of money shortly after his home was foreclosed upon. In Michigan you have six months from the date of foreclosure in which you can still keep your home if you pay the full amount owed to them. During this six month period the client and I spent hours on the phone with Bank of America trying to pay them over $150,000.00 –the full amount owed on the mortgage — and kept getting bounced around from desk to desk. Bank of America had two options, decline our money, and lose over $50,000 when they tried to re-sell the house, or accept our offer get paid in full and move on. A rational person wouldn’t think twice, you take the money. But this is Bank of America. It took over six months, hours on the phone, and a lawsuit to get them to accept the money.

So the next time you think that if you could only talk to the bank, you could come up with a deal that makes sense, realize you can’t. Banks aren’t people, people generally have common sense, banks do not.