Jackie Ramos vs Bank of America, part 2

By Felix Salmon
January 30, 2012

[youtube width="600" height="486"]http://www.youtube.com/watch?v=newQV-8cuTE[/youtube]

Remember Jackie Ramos? She caused a huge stir by going public, on YouTube, with her story of working for Bank of America, which fired her for allowing customers to pay off their debts with installment loans.

Now Ramos is back, and her latest story of Bank of America is even worse. The short version: BofA started charging her extra money, on her mortgage bill, for mortgage insurance she’d never asked for. Eventually, when she found out what the charges were for, she agreed to keep on making those insurance premiums, since they would allow her to stay in her home if anything ever happened to the other person on the mortgage, her son’s father Tim.

Then, in April 2011, Tim died — and the mortgage insurance didn’t pay out. Instead, BofA foreclosed on Ramos, and she lost her house. When she tried to ask why the insurance didn’t pay out, they wouldn’t answer her questions, on the grounds that she and Tim weren’t married.

Over email, Ramos told me that the insurance in question was absolutely mortgage life insurance, over and above the standard mortgage insurance which they already were paying for from another provider. That’s what BofA explained when they agreed to keep on paying the premiums. And Ramos also passed on a tax form 1098 from Bank of America to Tim, which clearly shows that Tim had paid mortgage insurance premiums in 2011 — even as the bank is now telling Ramos that there was no mortgage insurance at all.

At the very least, this is a case of Bank of America communicating in an absolutely atrocious manner with one of its homeowners. And at worst it’s a case of BofA foreclosing on and evicting someone who should instead have had her home paid off. One can’t expect that anybody at BofA realized that the person they were talking to was that Jackie Ramos. But it’s unfortunate for them that they didn’t. Because I suspect that this video might prove just as popular as the last one — which received more than 440,000 views, at last count.

Comments
10 comments so far

Do these ‘views’ count for anything?

The powers that be refuse to prosecute the banks. Settlement is all they crave. What nonsense.

Posted by MarkWolfinger | Report as abusive

I am referring to YouTube views. Not your views!

Posted by MarkWolfinger | Report as abusive

I don’t really think there is enough information here to really make a judgement one way or another about what happened. The video throws around the term “mortgage insurance” a lot which usually has nothing to do with protection for the borrower. I’d want to know much more specific information about what type of “mortgage insurance” product she was actually paying for.

Also, were there provisions that nullified the insurance in the case of suicide? Was she for sure the beneficiary? I’m definitely not saying she didn’t get screwed but there needs to be more information before the torches and pitchforks come out.

Posted by spectre855 | Report as abusive

“Over email, Ramos told me that the insurance in question was absolutely mortgage life insurance, over and above the standard mortgage insurance which they already were paying for from another provider. That’s what BofA explained when they agreed to keep on paying the premiums. And Ramos also passed on a tax form 1098 from Bank of America to Tim, which clearly shows that Tim had paid mortgage insurance premiums in 2011 — even as the bank is now telling Ramos that there was no mortgage insurance at all.”

Perhaps as some have commented, there may be some loopholes in the term “mortgage insurance.” But at some point, products can not be sold with the intention of not actually providing any value. For instance, buried in the fine print, did this “policy” have a clause that it only pays out for deaths that occur in months that begin in a vowel, on an even day, in leap years?
When we have a system in which we call forgery “robosigning” we have reached the point of not just torturing the language, but going full inquisition.

Posted by fresnodan | Report as abusive

spectre855… no question, there will be some legally legitimate ‘get out clause’ for BofA, but that misses the point.

This video is about the ‘right and wrong’ about the whole mortgage insurance business. The selling of these policies has already been shown to be quite dodgy. I suspect we will see another Huff Post follow-up to this video, and we will have a chance to find some more facts about the policy. Ultimately, this is about trust, and doing the right thing.

Insurance is a business based on trust. If you have ever called in a claim on a policy, you know the scared feeling that goes through your head ‘is this really covered?’… ‘did I invalidate my policy somehow accidentally’… ‘is there something in the small print that will keep them from paying?’ And hopefully, you also know the relief when the claims department doesn’t seem overly extreme looking for a ‘get out’, they confirm that the loss has happened, and pay… that’s how it’s supposed to work.

It is written into the DNA of the insurance bus that there is a balance between protecting profits, and keeping customer trust. With enough effort many claims can be avoided by looking hard at the small print, but the fact is if the policy was sold to cover an event, and the event happened, then the ‘right’ thing to do is pay out.

Posted by FinanceChicken | Report as abusive

If the policy should pay out according to its terms, I hope that she gets fully compensated for her losses, including substantial consequential damages.

That said, Felix left out the extremely important fact that the death was a suicide. The norm is that life insurance policies – not just mortgage life insurance policies, but “standard” term and whole life policies – have exclusions for suicide for 2 years after the policy is written. I think mortgage life insurance is a poor purchase because of high pricing relative to standard term policies. Marketing letters that I’ve received for it have struck me sort of shady, but I have no issue with a suicide exclusion on the policy. While I’m sympathetic to her difficult situation, a suicide exclusion for a period after a policy is written isn’t some fine print clause that’s only there in a shady corner of the life insurance market. It’s pretty much necessary in some form to keep the life insurance market functioning as intended.

Here’s a brief overview of the topic -http://www.bankrate.com/finance/insuran ce/protecting-life-insurance-policy-clai ms-1.aspx

Posted by realist50 | Report as abusive

@FinanceChicken – I’ll take a little exception to your statement that “Insurance is a business based on trust.”

The insurance business is based on a binding contract between the insurer and the insured. You are quite right that some insurers will pay out claims when they could technically find a valid cause not to. But I would contend that this is based not on a concern about “trust” or “doing the right thing”. It is based on a pretty straight forward calculation on whether their cost to fight a particular claim is worth more than just paying it.

None of this is relevant to whether mortgage life insurance is a good idea or the particulars of this case. But I just don’t think it is correct or wise to spread the idea that “doing the right thing” when it is not what is stipulated in the contract is common practice in the insurance industry.

Posted by MaxUtil | Report as abusive

There’s nowhere near reportable information in this video. Only accusations, assumptions, hearsay and possibly slander. I can’t believe we have devolved so badly that our society follows someone’s personification of a bank like mice following the Piper

Posted by Spazmaster | Report as abusive

There’s nowhere near reportable information in this video. Only accusations, assumptions, hearsay and possibly slander. I can’t believe we have devolved so badly that our society follows someone’s personification of a bank like mice following the Piper

Posted by Spazmaster | Report as abusive

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