It’s clear that banks are still not complying with the settlement agreement reached with federal agencies and lawmakers in April 2012. Bank of America, Wells Fargo, JP Morgan Chase, and Citibank have all violated terms of the agreement and have yet to meet all of its requirements. Ally Bank is the only bank to have met all requirements.
In April, the “Big Five” promised to provide $25 billion to troubled borrowers, and comply with reforms in loan modification requests, evictions and home seizures.
Across the board, federal and state officials, homeowners, lawyers bringing cases to light, and economic-justice groups are all bringing to light this brash lack of compliance.
Some of the issues not being met are: providing accurate information for missing documents, creating a single point of contact for homeowners, and perhaps more severe, stalling and then denying HAMP loan modification requests.
A court-appointed monitor of the settlement agreement, Joseph A. Smith, released his report on the organizations. Four out of the five banks were found to be in violation with the terms of the agreement. Citigroup received three negative marks, Bank of America had two, and Wells Fargo had one.
The court monitor used 29 different metrics required by settlement performed by each bank’s own special review board, with oversight by accounting and legal firms working for Smith.
The main issue? Big banks fail to notify homeowners of missing paperwork in the loan modification, within five days of its receipt. Citigroup and Bank of America were cited for providing inaccurate and false information to troubled homeowners before initiating a foreclosure.
Citigroup also failed a requirement that borrowers be notified of missing documents within 30 days of a request for short sale.
Chase failed to remove bank-imposed insurance within 15 days of receiving evidence that borrowers had their own coverage.
What needs to be done to curb these incessant violations by some of the largest mortgage services companies? What are your thoughts?
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