Whistleblower Involved In Outing Big Banks Says Keeping It Secret For 3 Years Wasn’t Easy

Not being able to tell your family why you were out of work and broke for three years would be something most of us couldn’t even imagine. One of the whistleblowers involved in the investigation that led to this year’s $25 billion mortgage settlement with some of the nation’s biggest banks says he had a pretty rough time waiting things out, while not being able to utter a word to his loved ones.

Kyle worked for a subsidiary of subprime mortgage lender Countrywide Financial, which was then bought by Bank of America in 2008. At the time, he was an appraiser for the subsidiary, and says he witnessed the company making bad loans on home with low collateral, reports ABC News.

He said he tried to make suggestions on how to “fix” the situation he saw going on all around him, where the company would encourage appraisers to boost home values for sales.

“You go in there, figure out who was taking advantage of them, you lower the interest rates, make it easier to stay in their homes,” he had proposed to the company. “There were three or four things I wanted to do and they looked at me like I was nuts and said, ‘No thanks, Kyle. Go back to doing your job.'”

He complained to company executives about the inappropriate appraisal and lending practices, but they didn’t find impropriety after investigating the matter, according to the suit. He was never given a reason why he lost his job in November 2008.

“My suspicion was that they didn’t want Bank of America to know what they were up to,” he said. “That’s just my opinion.”

He then contacted a law firm that had already filed a related suit, and told them he could help and wanted to get people back on track again. In May 2009 he filed his lawsuit against Countrywide, and it was sealed as part of the wider Department of Justice investigation. He wasn’t allowed to speak of the lawsuit, the federal probe or any of it — and was unemployed and almost broke the whole time.

“If you can imagine being in a bad economy and, all of a sudden, your income dropping to nothing and not being able to tell people or your wife and kids … it was probably worse on the kids,” he said. “Your kids looking at you like you are a failure. A lot of people would have bailed out. It was pretty tough. There were a lot of money issues and lack of money and, in your own mind, you think they’re looking at you because you failed.”

The lawsuit has now been unsealed, and he was able to tell his family all about it. His part in the ordeal led to a $1 billion settlement with Bank of America, and he was awarded $14.5 million as a result.

“I don’t think anybody believed until the funds actually hit the bank,” he said.

Bank of America, Countrywide Whistleblower Kept 3-Year Secret [ABC News]



Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.