New York AG to sue Wells Fargo and Bank of America
()Bank of America and Wells Fargofor allegedly violating terms of the National Mortgage Settlement.
Included in those standards were four guidelines dictating the timeline for banks to process mortgage modification applications.
The AG’s office has documented 339 violations of these national servicing standards by Wells Fargo and Bank of America since 2012.
AG () sent a letter to the parties that oversee the National Mortgage Settlement in response to complaints from New York homeowners who were put at risk by the violations of the banks. The letter informed the parties that () intends to sue Wells Fargo and Bank of America (BAC) .
This would represent the first time an Attorney General brought a legal enforcement claim under the auspices of the National Mortgage Settlement, the New York AG's office claims.
He added, "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."
In 2012, () joined 48 states, the Department of Justice and the five largest mortgage () to negotiate the settlement, which includes $25 billion that has been allocated via a combination of direct payments to the 49 states and mandated forms of consumer relief.
There are 304 servicing standards included in the settlement.
In order to address long standing complaints from consumers and advocates that () subject to the settlement — Ally Financial/GMAC, JP Morgan Chase (JPM), Citibank (C), Bank of America and Wells Fargo — persistently failed to provide fair and timely customer service, the servicing standards were incorporated into the settlement.
Bank of America provided the following statement regarding ()'s claims: "Through March we have provided relief for more than 10,000 New York homeowners through the National Mortgage Settlement, totaling more than $1 billion.
Attorney General () has referenced 129 customer servicing problems which we take seriously and will work quickly to address. This agreement has been good for New York, and we continue using these beneficial programs to assist troubled homeowners in New York and nationally."
Joseph Smith, the national mortgage settlement monitor who is overseeing the servicers' progress in complying with the guidelines, released a statement acknowledging further improvement is needed.
"Like General (), I continue to believe there are areas in which the banks must improve their treatment of their customers. I appreciate his interest in this important issue," Smith said.
"Under the Settlement, there is a process that allows me to conduct reviews of the banks' compliance and report them to the public. I am following this process and look forward to sharing my findings and enforcement activities in June. As monitor, I intend to use the full breadth of my power under the settlement to hold the banks accountable," he added.