News that Wells Fargo and Bank of America failed to comply with the mortgage loan modification timeline processing requirements of the mortgage servicing standards mandated by the national mortgage settlement are bittersweet for New York Attorney General Eric Schneiderman.
Earlier in May, Schneiderman announced plans to pursue enforcement actions against Wells and B of A “for violating several servicing standards” including the timeline for notifying borrowers of deficiencies in their mortgage modification applications.
The latest findings of national mortgage settlement monitor Joseph Smith's progress report that evaluate Wells Fargo affirm assertions made by New York State that Wells “is failing to live up to its obligations under the settlement,” the AG noted in a statement.
“It affirms that the pattern of violations by Wells Fargo that my office documented in New York is harming homeowners nationwide.”
Based on “mounting evidence,” Schneiderman said, on May 23, his office provided “a revised and updated packet of complaints” to the monitoring committee and the monitor to aid the committee in assessing the alleged violations.
The monitor also assessed the performance of Bank of America, Ally Financial/GMAC, Citi and JPMorgan Chase. And while Smith was unable to assess B of A’s compliance with the loan modification timeline because the bank failed to enact them in time for the review, Schneiderman notes, the monitor did report B of A has failed “at least one of the standards” in the NY AG’s complaints list. Most of the banks have defended their actions in comments to Bloomberg News responding to
Schneiderman may have to wait until
According to the AG reports from B of A,
Under the settlement, participating servicers are required to adhere to 304 servicing standards intended to improve the loan modification process for homeowners including five that dictate the timeline for banks to process loan modification applications and to make loan modifications permanent.
The New York complaint packet included written complaints against B of A and Wells “and a significant amount of back-up documentation.” Schneiderman says his office has documented hundreds of violations of those standards by both banks since October 2012.
Several other states provided complaints of similar recurring violation allegations by the servicers with the monitoring committee.
The AG recognizes that the committee may choose to pursue enforcement using its authority under the settlement, or defer action, but if the committee declines to take action “the complaining party may pursue the legal claim on their own after a 21-day waiting period.”
At least for the New York complaint, that waiting period was officially over on June 14.
