Reprinted for Appraisal News Online
New York Attorney General Eric Schneiderman announced May 6 that his office intends to sue Bank of America and Wells Fargo for purported violations of the 2012 national $25 billion mortgage settlement between the nation’s largest banks and 49 state attorneys general, The Wall Street Journal reported.
The attorney general’s office provided notice “pursuant to the settlement’s requirement” regarding its intent to sue both banks.
Schneiderman said the two banks have been delinquent in promptly responding to loan modification requests from borrowers. He said that his office has uncovered 339 violations of settlement service standards by Bank of America and Wells Fargo, the Journal reported.
Other banks included in the original settlement are J.P. Morgan Chase, Citigroup and Ally Financial. Schneiderman has not ruled out actions against those institutions, but said Bank of America and Wells Fargo stand out as having the most violations of settlement standards.
Settlement monitor Joseph Smith noted in a report released in February that while the five banks had provided $45.8 billion in relief to borrowers between March and December 2012, the volume of customer complaints had increased in recent months.
Among the complaints filed by New York borrowers are that banks have required them to resubmit loan modification requests numerous times because they are taking so long to process them that homeowner information becomes out of date. Homeowners also reported difficulty in reaching by phone any points of contact at the banks.
“I intend to use the full breadth of my power under the settlement to hold the banks accountable,” Schneiderman told the Journal.
Iowa Attorney General Tom Miller said his office also has received a lot of homeowner complaints and is monitoring the situation to see what results from Schneiderman’s efforts.
In response, a Wells Fargo spokesperson said that the bank is fully committed to complying with settlement standards.
Bank of America, however, was more reactive.
In a letter made public May 13 by National Mortgage News, Bank of America said that Schneiderman has no right to take enforcement action against it over claims that it violated terms of a nationwide foreclosure settlement.
It noted that the settlement does permit enforcement actions but only after a bank has had an opportunity to “cure” the violation and has failed to comply with defined metrics. The bank said it has complied with “every applicable metric.”
“Your office has no right under the express terms of the national mortgage settlement to commence an enforcement action against Bank of America, and we respectfully request that your notice of intent to do so be publicly withdrawn,” attorneys for the bank stated in the letter, National Mortgage News reported.
Schneiderman’s office did not respond to National Mortgage News’s request for comment about the letter.