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May 7, 2013

2 Big Banks Face Suits in Mortgage Pact Abuses

New York’s top prosecutor plans to sue two mortgage titans, Bank of America and Wells Fargo, over claims that they breached the terms of a multibillion-dollar settlement intended to end foreclosure abuses.

On Monday, Eric T. Schneiderman, New York’s attorney general and top prosecutor, said that the lenders violated the terms of the National Mortgage Settlement, a sweeping $26 billion pact brokered last year between five of the nation’s biggest banks and 49 state attorneys general. The agreement came during a national outcry over potentially widespread foreclosure abuses like shoddy paperwork, erroneous fees and wrongful evictions.

Mr. Schneiderman says that Bank of America and Wells Fargo did not follow guidelines dictating how the banks field and process requests from homeowners trying to modify their mortgages.

Under the terms of the settlement, banks have to abide by 304 servicing standards, like notifying homeowners of missing documents within five days of receiving a loan modification and providing borrowers with a single point of contact.”

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Read full New York Times article here

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