New York Attorney General Eric T. Schneiderman announced Monday he intends to sue Bank of America and Wells Fargo for violating the $25 billion national mortgage settlement with the states.
As part of the 2012 deal, which Connecticut Attorney General George Jepsen helped craft, the nation’s five largest banks agreed to provide mortgage relief to homeowners and abide by new servicing guidelines, which included timely response to modification requests and to keep track of paperwork.
Wells Fargo maintains it is compliance while Bank of America told the Washington Post it will work to correct any problems.
Schneiderman, in a press release, said his office has received a host of complaints from consumers and the professionals who are helping consumers navigate the mortgage modification process. New York is reporting there were 339 violations by Bank of America and Wells in the Empire State since October of last year.
“The five mortgage servicers that signed the National Mortgage Settlement are legally required to take specific, rigorous, and enforceable steps to protect homeowners,” Schneiderman said in a press release. “Wells Fargo and Bank of America have flagrantly violated those obligations, putting hundreds of homeowners across New York at greater risk of foreclosure. I intend to use every tool available to my office to hold these companies accountable under the terms of the National Mortgage Settlement.”
According to the independent monitor hired to make sure the banks comply, Connecticut was the only state where more professionals, like attorneys and housing counselors, complained about the banks’ process than New York. The monitor tracked complaints between April of 2012 and January of 2013.
However, in Connecticut, direct consumer complaints about the process were among the lowest.
Connecticut Attorney General George Jepsen said he is reviewing New York’s complaint.
In an email sent via his spokeswoman, Jepsen said, “As a member of the Monitoring Committee of the National Mortgage Settlement (NMS), I take any alleged violation of the NMS very seriously. The NMS provides the monitoring committee and each state with the ability to enforce provisions of the settlement, including filing suit, if necessary. Today I received a copy of New York’s letter identifying potential problems with some banks compliance with the NMS. I was aware of many of the issues raised by New York. I am reviewing the information provided by New York’s and will work with the other members of the monitoring committee to ensure full compliance with the NMS.”
The AG’s office maintains that the reports it’s getting from mortgage pros and consumers are that the banks have been more responsive since the settlement, though staff are still hearing complaints about lost documents and a lack of timely communications.
Connecticut’s AG pledges to work with the banks to correct the issues.
Under the agreement, the monitoring committee has 21 days to review New York’s complaints at which time it might decide to move as a group to sue or do nothing and allow New York to go it alone.
