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NPR Runs Bank of America PR Piece, Neglects to Explain Why Bank is Donating Foreclosed Homes

NPR ran a sappy story yesterday about Bank of America donating foreclosed homes, which got a critical response in their comment section. Here’s a representative sample of the comments:

This was a poorly researched, uncritical story by NPR. Why is it good thing to dispossess 2500 families from their homes and then give the houses to people deemed more needy by BofA? And why didn’t NPR mention that BofA acknowledged employing people who legally attested to the accuracy of foreclosure documents without reading them; and reached a multi-million dollar settlement with the Justice department for illegally foreclosing on military service members?

The story really facilitated the “camo-washing” efforts by the banks to improve their public image. The story focuses on Bank of America’s donation of 2,500 homes over the next two years, mostly to Iraq and Afghanistan war veterans. But it leaves out a number of key details. First, it never mentions what the commenter says above, that BofA was one of several banks cited for illegally foreclosing on service members while they were deployed overseas, leading to a large settlement which included the donation of homes to veterans. That means that this action has nothing to do with a generous spirit but acts as the fulfillment of an obligation.

But it gets worse. The foreclosure fraud settlement, also referenced above, included a system of “credits” for banks to pay off their penalties. One of the ways banks could get that credit is by… donating homes. So it’s entirely possible that they are getting credit for two separate settlements with the government by donating homes to veterans; both the foreclosure fraud settlement and the settlement on violations of the Servicemembers Civil Relief Act.

The punchline is this: banks always donate some stock of homes as a matter of routine. It is meant to generate positive headlines like the one NPR gave them yesterday. If BofA didn’t have a settlement obligation to fulfill, they would still donate homes. And so the idea that donating homes represents a penalty just shows you how toothless the settlements really are. But BofA has managed to figure out how they can kill two of their settlement birds with one stone.

But NPR completely missed the boat on that, preferring to buy the PR that BofA sold them.

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David Dayen

David Dayen