BofA and the Parrot: Bird’s Eye View of the Foreclosure Mess
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MySpaceBy James R. Hagerty
- Jeff Swensen for The Wall Street Journal
- Angela Iannelli and her 11-year-old Blue Macaw, Luke, missing.
“It isn’t about the parrot,” a lawyer for Angela Iannelli told me.
The issue, insisted the lawyer, Michael Rosenzweig of Edgar Snyder & Associates in Pittsburgh, was the distress inflicted on Ms. Iannelli by Bank of America Corp.’s bungling. As we reported Wednesday, the bank apologized for an incident in which its contractors entered her home near Pittsburgh while she was out, cut off utilities, padlocked the door and confiscated her pet parrot. Though Ms. Iannelli had fallen a month or so behind on mortgage payments, her case hadn’t reached the stage at which Bank of America would be justified in taking such actions to “secure” the collateral.
She had to find someone with a bolt cutter to get back into her own house.
Ms. Iannelli, 46 years old, alleges that the incident — which separated her from her 11-year-old parrot, Luke, for more than a week — caused so much “emotional distress” that she needed a prescription medication for anxiety.
Journalists who cover the foreclosure crisis get calls and emails every day from Americans who complain about banks’ disorganized and sometimes cold-hearted responses to people trying to save their homes. (We don’t hear about the cases in which bank employees do a good job, and surely that happens in many cases.) So why write about Luke the parrot? Because Luke makes a good symbol of what happens when bureaucratic organizations are overwhelmed by a wave of human misery.
Banks’ mortgage-lending departments are efficient when it comes to making loans and collecting payments. They’ve honed their employee incentives and procedures over decades. They didn’t spend nearly as much time thinking about how to handle defaults and foreclosures because it was always assumed those would remain the exception, to be handled by an obscure department known as “loss mitigation.”
Today distressed borrowers are hardly exceptional. Nearly eight million households, or 15% of those with mortgages, are behind on their payments or in the foreclosure process. Many borrowers complain that they get the runaround when they call their lenders for help, receive contradictory information from different employees and are required to repeatedly fax in same documents.
Suicide threats from distressed borrowers are so common that one lender, OneWest Bank Group, Pasadena, Calif., has had to establish procedures for alerting the police. Lenders’ call-center employees are under heavy pressure. “These people make $14 or $15 an hour and we ask them to move mountains,” a OneWest executive said at an industry conference last month.
In her suit, filed Monday in the Allegheny County Court of Common Pleas, Ms. Iannelli says a contractor hired by Bank of America entered her house about 15 miles north of Pittsburgh in mid-October when she was away. In what it describes as an “invasion” of the home, the lawsuit says that the contractor stopped utility services, cut water lines and electrical wiring, damaged flooring and finishings, poured antifreeze into sinks and toilets and “stole” the parrot.
Ms. Iannelli, who owns a diner and works part time as a bartender, alleges in her suit that Bank of America representatives were unhelpful when she called in to protest. They first told her they had no idea where the parrot was. Days later, they finally determined that Luke was at the offices of the contractor in Ebensburg, Pa. — 80 miles from her home. Bank of America didn’t deliver Luke home. Instead, Ms. Iannelli had to drive across a mountain range to fetch him. The round trip took about four hours.
Anyone who has ever tried to sort out a minor problem with a credit-card bill or bank statement by dialing an 800 number will sympathize with Ms Iannelli. She says bank representatives at various times during her ordeal told her they were “tired” of hearing from her, said their computers were down, put her on hold, asked her to called back later, hung up on her, and advised her to seek help from the police if she was so worried about her pet.
Her lawyer, Mr. Rosenzweig, said Ms. Iannelli is seeking damages of more than $50,000. The amount of any damages would be decided by a jury if the court goes to trial.
A Bank of America spokesman said the bank will “quickly to review the allegations in the lawsuit, the actual events that led to them and the causes of those events, and consider any hardship that resulted.”
After she drove two hours to reclaim her parrot in October, Luke initially seemed nervous, Ms. Iannelli said in an interview Wednesday. “He’s doing very well now,” she said.
Luke, a macaw with blue and orange plumage, now may be the nation’s most famous parrot. His picture was in The Wall Street Journal; he appeared on ABC’s “Good Morning America” television show Thursday.
The parrot had no comment.
Please follow me for housing news on Twitter @jamesrhagerty
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