Joseph Smith, the monitor of the National Mortgage Settlement, said the grace period for the nation’s largest lenders to become compliant with his office’s 304 mortgage servicing standards, is now ended.
Ally Financial, Bank of America (BAC), Citigroup (C), JP Morgan Chase (JPM) and Wells Fargo (WFC) all signed on to the new standards that guide interactions with mortgage holders.
“Today is the 180th day since the entry of the consent judgments comprising the National Mortgage Servicing Settlement. As of today, the five banks subject to the Settlement are required to operate in full compliance with its servicing standards. I will conduct careful and thorough reviews of the banks’ processes to assure and verify that they are compliant with the Settlement’s rules,” said Smith in a statement.
As part of the agreement, the mortgage servicers agree to end the practice of foreclosing on borrowers who are being considered for a modification, known as dual tracking. The settlement also required servicers to establish a single point of contact for distressed borrowers, new oversight to end mishandled paperwork and the signing of documents en masse without a review of the loan file among other abuses.
“While my team and I will work to review the banks’ compliance ourselves, I also need to hear from consumer professionals in the marketplace who work on these issues day in and day out. I am asking these professionals to report to me when they see a mortgage servicer breaking the rules established in the Settlement.”
