Bank of America is prepared to address allegations from former employees who claim the mega bank routinely stalled the application process for the government’s Home Affordable Modification Program and wrongfully informed homeowners about the status of documents already on file.

The former staff members also claim employees at BofA steered clear of allowing completed loan mods in favor of less favorable solutions that eventually landed in borrowers laps after a long period of struggle in trying to obtain a modification. At one point, allegations even surfaced that employees had to pick appropriate reasons for denying old loan modification applications to justify HAMP denials submitted to the Treasury.

Bank of America’s (BAC) response was submitted to HousingWire Monday. The controversial declarations are part of an ongoing case in a federal court within Washington state.

BofA has not had a chance to respond in court records yet, but is expected to soon.

The case – Kamie Kahlko v. Bank of America – took a more pointed turn when several former BofA employees in customer service positions offered declarations in the case suggesting the bank was more interested in delaying HAMP applications and eventually steered troubled borrowers into solutions or situations that were more profitable for the bank.

In several of the depositions, the former employees painted a picture of a servicer that routinely stalled and failed to timely process documents associated with HAMP loan modification requests.

One woman working as a customer service representative said she "was instructed to inform every homeowner who called in that their file was under review – even when the computer system showed that the file had not been accessed in months or when the homeowner had already been rejected for a loan modification."

She added, "Bank of America regularly ignored completed loan modifications and did not treat the loan as having been modified in its computer system. Even after a homeowner signed and returned modification documents, BofA’s computer system continued to show the loan as delinquent."

A man formerly employed as a Case Management Team Manager also filed a declaration in the case, claiming BofA "used a common strategy of delaying HAMP applications."

Common tactics included telling borrowers documents were still missing – even when they had already been filed – or simply saying cases were still under review, he alleged. The former team managersays once the bank delayed long enough, borrowers were offered another solution that was usually less beneficial to homeowners.

"The unfortunate truth is that many and possibly most of these people were entitled to a HAMP loan modification, but had little choice but to accept a more expensive and less favorable in-house modification," the former employee claimed.

The case team manager went on to claim that BofA would hold a "blitz" twice a month, encouraging teams to clear out backlogs of HAMP loan mod applications by denying any file that had financial documents older than 60 days. He claims these files included homeowners who provided all of the necessary documents for HAMP and who had complied with terms of the trial term period.

"During a blitz, a single team would decline between 600 and 1,500 modification files at a time for no reason other than that the documents were more than 60 days old," the case team manager said.

He said managers and underwriters were advised to decline the mods and find suitable explanations for reporting purposes to the U.S. Treasury. The U.S. Treasury oversees the government's HAMP program, which was designed to help distressed borrowers by offering more robust loan modification initiatives.

BofA in a statement denied the content of the former employees' declarations.

"Bank of America has successfully completed more modifications for our customers in need of assistance than any other servicer under the Home Affordable Modification Program," the bank wrote in a statement.