Sen. Boxer: Servicing standards fall short of settlement

U.S. Sen. Barbara Boxer, D-Calif., sent a letter to federal officials urging them to investigate allegations that banks are not fully complying with servicing standards laid out in the National Mortgage Settlement.

The huge $25 billion-plus settlement between state attorneys general and mortgage servicers included bans on dual-tracking and required single-point-of-contacts at servicing shops for all borrowers going forward among other provisions.  

Boxer, citing a survey of California housing counselors, warned Attorney General Eric Holder and HUD Secretary Shaun Donovan in a letter that banks may still be violating terms of the deal.

The letter, which was also mailed to National Mortgage Settlement Monitor Joseph Smith, cites a survey of housing counselors compiled by the California Reinvestment Coalition. The survey responses suggest banks are still losing documents and improperly denying modifications to qualified homeowners, Boxer alleges.

“I strongly urge you to investigate the violations reported in this survey and to hold the banks accountable by taking strong enforcement actions,” the senator wrote.

“Too many Californians already have lost their homes unnecessarily during the foreclosure crisis due to bank malfeasance or error. It is essential that you take swift action to ensure that the banks are meeting their obligations under the terms of the settlement and that struggling homeowners receive the assistance they need.”

Joseph Smith, who is leading up the National Mortgage Settlement and monitoring the compliance of servicers, responded to Boxer’s concerns Friday morning.

“I share Sen. Boxer’s concerns about the banks’ compliance. That is why my team and I are continuing our efforts to conduct the oversight work outlined in the settlement,” Smith said.

“In accordance with that timeline, I will release my first compliance report next month; at that time I look forward to discussing my findings with the senator and other interested parties, including the public. Like Sen. Boxer, I continue to believe there are areas in which the banks must improve their treatment of their customers, and as the monitor of the settlement, I intend to hold them fully accountable.”

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