A top regional official from the investigative arm of HUD said Bank of America "significantly hindered" a federal investigation of the megaservicer’s foreclosure practices, according to a report from Dow Jones.
In a seven-page statement filed June 8 in an Arizona state court in Phoenix, William Nixon, a Department of Housing and Urban Development assistant regional inspector general, detailed several examples in late 2010 when officials of the Charlotte-based bank allegedly failed to cooperate with investigators.
Nixon said B of A attorneys refused "on a number of occasions...to allow employees to answer questions" about changes in the company's foreclosure process.
When HUD investigators tried to conduct a previously scheduled "walkthrough of the document execution group," an outside lawyer and a Bank of America VP "asserted that they did not understand the need for a walk-through and instead showed my staff a set of file cabinets," Mr. Nixon said.
The sworn filing was submitted by Arizona Attorney General Thomas Horne in an effort to win approval from a judge to interview former bank employees without lawyers for the bank being present.
The Arizona attorney general's office filed a lawsuit last December against Countrywide Financial Corp., which B of A bought in August 2008. The state's allegations include violations of Arizona consumer-protection laws in the handling of troubled loans. (CFC has faced similar foreclosure-related allegations in other states.)
A bank spokesman said the lender/servicer "fully cooperated with the HUD Office of Inspector General's review of mortgage-servicing practices, and any suggestion otherwise is both inaccurate and inconsistent with how we work with all regulators."
He added, "We have made, and will continue to make, significant improvements in our loan modification and foreclosure process, nationally and with the states hardest hit by the unprecedented economic downturn, including Arizona."
