Monday, March 14, 2011 by The Huffington Post
A group called Anonymous has released material relating to mortgages issued by a major US bank.
by Ryan McCarthy
A group called Anonymous has released material relating to mortgages issued by a major US bank.
by Ryan McCarthy
The WikiLeaks-allied hacker group Anonymous has posted a series of emails purported to be from a former Bank of America employee, which the organization says prove "corruption and fraud" at the nation's largest bank.
In a release announced with the Twitter hashtag #BlackMonday, Anoymous posted the emails on the site BankofAmericasuck.com, where an emailer who identifies himself as an ex-Bank Of America employee airs a number of grievances against his former employer. The website's availability was up and down early Monday morning, potentially due to high traffic. The e-mails could not be independently verified.
In a statement to Reuters on Sunday, a Bank of America spokesman said the emails are simply clerical and administrative errors. ""We are confident that his extravagant assertions are untrue," the spokesman told Reuters.
Bank of America did not immediately return multiple calls on Monday.
The claims of the person purporting to be a former employee appear to begin with so-called "forced-place insurance," in which a mortgage borrower who doesn't maintain an insurance policy on their home has a policy "placed" for them by their insurer. The problem with forced-place insurance, as Felix Salmon noted in November, comes when a mortgage servicer owns an insurer. This can allow for highly inflated premiums and inadequate policies forced upon borrowers without their knowledge.
The emailer's accusations involve Balboa Insurance, a company that Bank of America acquired in its purchase of Countrywide Financial in 2008 and recently sold to the QBE Group, an Australian insurer. Balboa is a market leader in forced-place insurance.
The following section appears to be the main thrust of the emails:
The post includes what appear to be internal Balboa emails containing communications about mismatched -- and possibly deleted -- loan file numbers in Balboa's system.
In one email, a Balboa employee wonders about creating "huge red flags" for auditors over a change in record keeping, adding that it "just doesn't seem right to me."
When asked by Anonymous about his motivation for revealing this information, the author writes: "The only reason I'm doing this is because they already took everything from me…these people are still employees and have bills to pay and think it's illegal to expose fraud at this bank… Nobody wants to end up like me hiding out in my house having to talk to police officers and lawyers. Nobody will stand up until they see me in the traditional news. That's my short term goals right now."
You can read the emails here.
In a release announced with the Twitter hashtag #BlackMonday, Anoymous posted the emails on the site BankofAmericasuck.com, where an emailer who identifies himself as an ex-Bank Of America employee airs a number of grievances against his former employer. The website's availability was up and down early Monday morning, potentially due to high traffic. The e-mails could not be independently verified.
In a statement to Reuters on Sunday, a Bank of America spokesman said the emails are simply clerical and administrative errors. ""We are confident that his extravagant assertions are untrue," the spokesman told Reuters.
Bank of America did not immediately return multiple calls on Monday.
The claims of the person purporting to be a former employee appear to begin with so-called "forced-place insurance," in which a mortgage borrower who doesn't maintain an insurance policy on their home has a policy "placed" for them by their insurer. The problem with forced-place insurance, as Felix Salmon noted in November, comes when a mortgage servicer owns an insurer. This can allow for highly inflated premiums and inadequate policies forced upon borrowers without their knowledge.
The emailer's accusations involve Balboa Insurance, a company that Bank of America acquired in its purchase of Countrywide Financial in 2008 and recently sold to the QBE Group, an Australian insurer. Balboa is a market leader in forced-place insurance.
The following section appears to be the main thrust of the emails:
"My name is (Anonymous). For the last 7 years, I worked in the Insurance/Mortgage industry for a company called Balboa Insurance. Many of you do not know who Balboa Insurance Group (soon to be rebranded as QBE First by Australian Reinsurance Company QBE according to internal communication sent to all Balboa associates) is, but if you’ve ever had a loan for an automobile, farm equipment, mobile home, or residential or commercial property, we knew you. In fact, we probably charged you money…a lot of money…for insurance you didn’t even need.
Balboa Insurance Group, and it’s largest competitor, the market leader Assurant, is in the business of insurance tracking and Force Placed Insurance (aka Lender Placed Insurance, FOH, LPI, etc). What this means is that when you sign your name on the dotted line for your loan, the lienholder has certain insurance requirements that must be met for the life of the lien. Your lender (including, amongst others, GMAC, Aurora Loan Services [a subsidiary of Lehman Bros Holdings], IndyMac Federal Bank [a subsidiary of OneWest Bank], Saxon, HSBC, PennyMac [a collection agency started by former Countrywide Home Loans executive Stan Kurland after CHL and Balboa were sold to BAC], Downey Savings and Loans, Financial Freedom, Select Portfolio Services, Wells Fargo/Wachovia, and the now former owners of Balboa Insurance themselves…Bank of America) then outsources the tracking of your loan with them to a company like Balboa Insurance.
Balboa makes some money by charging these companies to track your insurance (the payment of which is factored into your loan). If you do not meet the minimum insurance requirements set by your lienholder, Balboa Insurance places a force placed insurance policy on your loan. You are sent a letter telling you that you do not have insurance, and your escrow account is then adjusted for the inflated premium of a full coverage policy placed by Balboa’s insurance tracking group, run by Steven Ramsthel, Sr Vice President of Loan Tracking Operations & Customer Care at Balboa Insurance Group, as seen on his LinkedIn profile below..
How is Balboa able to charge such inflated premiums and get away with it?
It’s all very simple.
First, when you call in to customer service, for say, GMAC, you’re not actually speaking to a GMAC employee. You’re actually speaking to a Bank of America associate working for Balboa Insurance who is required by their business to business contract with GMAC to state that they are, in fact, an employee of GMAC. The reasoning is that if you do not realize you’re speaking to a Bank of America/Balboa Insurance employee, you have no reason to question the validity of the information you are receiving from them. If you call your insurance agent and ask them for the lienholder information for your GMAC/Wells Fargo/etc lien (home or auto) you will be provided with their name, but the mailing address will be a PO Box at one of Balboa’s 3 main tracking locations (Moon Township/Coreaopolis, PA, Dallas/Ft Worth, TX, or Phoenix/Chandler, AZ)The scope of these emails, according to their author, reaches far beyond poor customer service. In the email below, the author claims the bank's actions go much further, extending to what would seem to be extreme disorganization, or an allegedly willful intent to obscure Balboa's management of customer insurance policies.
The post includes what appear to be internal Balboa emails containing communications about mismatched -- and possibly deleted -- loan file numbers in Balboa's system.
In one email, a Balboa employee wonders about creating "huge red flags" for auditors over a change in record keeping, adding that it "just doesn't seem right to me."
When asked by Anonymous about his motivation for revealing this information, the author writes: "The only reason I'm doing this is because they already took everything from me…these people are still employees and have bills to pay and think it's illegal to expose fraud at this bank… Nobody wants to end up like me hiding out in my house having to talk to police officers and lawyers. Nobody will stand up until they see me in the traditional news. That's my short term goals right now."
You can read the emails here.
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