Attorney General Beau Biden is not happy with the findings of a report report that sees failures by national mortgage banks to meet mortgage servicing standards secured by Biden, 48 other state Attorneys General and the federal government in last year’s $25 billion national mortgage settlement.
“The nation’s five largest mortgage servicing banks did not follow the rules during the foreclosure crisis, and it appears they are not following the rules of the settlement now,” Biden said. “My office will take all necessary steps to protect consumers under the law and hold the banks accountable to their obligations.” The banks have been identified as Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial (formerly GMAC).
Biden responded to a report that sees failures failures by national mortgage banks to meet strict new mortgage servicing standards secured by Biden, 48 other state attorneys general and the federal government in last year’s historic $25 billion national mortgage settlement.
“The nation’s five largest mortgage servicing banks did not follow the rules during the foreclosure crisis, and it appears they are not following the rules of the settlement now,” Biden said. “My office will take all necessary steps to protect consumers under the law and hold the banks accountable to their obligations.”
The report, issued this morning by Joseph A. Smith, Jr., Monitor of the National Mortgage Settlement, revealed that testing of the five banks’ compliance with 29 new servicing standards established by the settlement revealed eight individual failures by the banks to meet those obligations. The most common failures related to the bank’s untimely collection of loan modification documents and failure to timely notify borrowers of loan modification or short sale decisions. According to the Monitor, the banks are working to correct those errors and will continue to be tested to determine improvement in meeting the standards.
In addition, today’s report also disclosed that since last year the Monitor has been notified of more than 60,000 homeowner complaints against the five servicing banks. These complaints are most commonly associated with frustration with the loan modification process, accuracy of account information, and customer service, including the new requirement imposed on the banks to provide a single point-of-contact to homeowners.
In February of last year, Biden, 48 other Attorneys General and the federal government reached a $25 billion settlement with five of the nation’s largest mortgage banks, resolving allegations of widespread mortgage servicing misconduct, including “robo-signing” of foreclosure documents by those banks. The settlement established a broad array of new mortgage servicing standards, and required the five banks to provide $45 million to Delaware in the form of direct payments, mortgage modifications and other assistance. Biden announced earlier this month that more than 2,500 Delawareans have received more than $67 million in these financial benefits to-date.
More information about today’s report and the National Mortgage Settlement is available at www.nationalmortgagesettlement.com.
