Wednesday, June 23, 2010

BofA Uses Computer Glitch As Excuse To Stiff Property Preservation Contractors Out Of Million$, Leaving Thousands Across Country Without Paychecks

In Fort Worth, Texas, WFAA-TV Channel 8 reports:
  • If the nation's largest bank had lost the records of thousands of its customers, federal regulators would take swift action. But that's just what Bank of America has done — directly and indirectly — with the paychecks of thousands of its contractors and subcontractors in the property preservation business.

  • The failure to pay contractors millions of dollars has created a tide of financial ruin in the backwash of the mortgage crisis. For most Americans, foreclosure is a personal tragedy. But Bank of America has a thriving business taking care of tens of thousands of foreclosed homes across the country. For months, the bank has not paid dozens of the contractors who do the work; and as a result, thousands of their employees have gone without a paycheck.


  • News 8 obtained a memo that Bank of America Field Services sent to its contractors last October announcing "delays in payment" because of computer problems. [...] News 8 has talked to contractors who worked in California, Colorado, Alabama, Mississippi, Florida and Tennessee who say non-payment by Bank of America crushed their businesses.


  • Bank of America declined to be interviewed on camera. In response to written questions, the bank said: "We apologize to our vendors for the system issues that resulted in late payments. We have been working diligently with our vendors and contractors to resolve any outstanding payments." [...] The institution won't say how much money is involved, but News 8 has learned the amount is in the millions.

For more, see Bank of America admits it did not pay dozens of contractors.