[Correction: An earlier headline referred to a "NY Judge." Judge Collyer is actually based in Washington D.C. and the headline is now corrected.]
U.S. District Judge Rosemary Collyer slapped down allegations from the New York attorney general that Wells Fargo violated the National Mortgage Settlement of 2012.
In a stinging rebuke to New York's top attorney, Eric Schneiderman, Collyer said that the settlement "does not require absolute perfection in loan servicing."
“Even so, because NYAG’s allegations of noncompliance are so insubstantial, NYAG has failed to allege breach of the Consent Judgment,” she wrote.
Collyer wrote that the New York AG’s office alleged that Wells Fargo failed to comply with the NMS standards in 97 out of the roughly 450,000 loans that Wells Fargo services in the state of New York.
The judge really took umbrage at the small potatoes and Schneiderman’s hyperbole.
“This amounts to less than .022% of the New York loans serviced by Wells Fargo,” she wrote. “Despite this small number, (the New York Attorney General) alleges that Wells Fargo repeatedly failed to comply with these Loan Modification Timeline Requirements, subjecting numerous New York homeowners to ‘Kafkaesque delays and obstructions in the loan modification process.’”
She said that if allowed the motion to enforce to go forward, it would bring a ton of frivolous lawsuits.
“To permit (the New York Attorney General) to enforce failures to comply with the Servicing Standards that are so insubstantial would open the floodgates to lawsuits, running afoul of the core purpose of the Consent Judgment––to resolve problems in the mortgage industry with monitoring and compliance and without litigation. No Party, and certainly not this Court, envisioned penny-ante enforcement actions regarding compliance with the Consent Judgment,” Collyer ruled “For this reason, and to protect the Court’s ability to manage its docket efficiently, (the New York Attorney General’s) Motion to Enforce Consent Judgment will be denied for failure to allege a breach of contact.”
The full opinion can be read here.