Bank employee arrested in short-sale scheme
Former Bank of America worker faces federal charges for allegedly accepting bribes to sell homes at lower prices than the bank would have.
Kevin Lauricella worked on delinquent mortgages for Bank of America until he was fired in 2011. He is accused of accepting more than $1 million in bribes for selling 18 properties in 2010 and 2011 at prices lower than what the bank would have approved, according to a report in the Los Angeles Times.
Borrowers who default on their mortgages can satisfy their debts by selling their homes for less than they owe, which is called a short sale.
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In a short sale, the lender writes off the difference between what the former homeowners owe and how much the home sold for. Because of the alleged scheme, Bank of America would have taken greater losses than it should have.
Ariel Neuman, an assistant U.S. attorney in Los Angeles, told the L.A. Times how the operation supposedly functioned:
"The buyers would either resell the homes at the actual property values or in some cases would refinance the property at the actual value, thereby extracting profits on the deals,” Neuman said.
Lauricella pleaded not guilty to the charges, in which he is accused of facilitating the sales by improperly approving short sales and falsifying bank records.
Lauricella’s arrest resulted from an FBI investigation, and the Times cited court records that said three other defendants had entered plea agreements about rigging short sales in Southern California. According to the Times, "A Bank of America spokesman said Lauricella had been fired in 2011 and that the bank cooperated with the FBI investigation of the case.
Like a foreclosure, a short sale translates into a massive blow to the former homeowner’s credit history. Consumers may also bear the financial burden of short sale incentives, which are taxable, as is cancellation of debt income. These aren’t always outcomes of short sales, however.
It’s unclear how manipulating the short sales may or may not have affected the former homeowners.
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I remember a movie called "Don't Steal anything Small".
I guess he never saw that movie and BoA did.......................
I don't see the problem here, a thief stealing from thieves... when will BofA execs go to jail for laundering South American drug profits?
This guy should be given a medal. To heck with BofA.
How about BoA gets charged with stealing from all the people they unjustly hiked rates on since 2008? January of '09 I had an account with MBNA, the interest rate was 8.99. February comes and no statement. Wierd, so I call and get auto-transferred to a BoA rep, HUH??? I'm told they now own my debt and I'm now on their billing cycle, which cut my January cycle with MBNA to 18 day. I'm now delinquent and the default rate is 32%, through no fault of my own, no prior notification, no replacement card, no interim statment, no customary one time late fee forgiveness, just huge attitude from the 'lady', and yes, that's sarcasm, with whom I end up speaking. I was transferred to a superior, who again gives me stink face over the phone, then tells me the only help they can offer is some third party debt consolidation counseling program they authorize... for a fee, of course(and probably a referral kickback!). WTF? SCREW you BoA! Over the next year all my other cards(Citibank, Amex, Discover) hiked rates from a low of 6.99 to a high of 17.99. I had absolutely no issues with those cards at all. How well do you think it would've gone over had I marched my happyass into my boss's office and said F you Mr Man, because of the financial meltdown I'm announcing an 18% raise in salary? I would've been fired on the spot! And that's, in effect, what I did to the credit card industry. It took a few years, but I will NEVER carry a balance again. I kept the open credit and have made infrequent charges just to improve/maintain credit scores. I have one primary card(triple points!), which I use for all pay activity during the month, but that balance is paid in full with every statement. Now that's PRICELESS!
Yikes, I guess I'm still a little bitter...