Business

N.Y. Attorney General: Banks Dropped The Ball On Loan Modification Applications

Schneiderman Announces Plan To Sue Bank Of America, Wells Fargo
Mortgage (credit: clipart.com)

Mortgage (credit: clipart.com)

TRI-STATE NEWS HEADLINES

From our newsroom to your inbox weekday mornings at 9AM.
Sign Up

NEW YORK (CBSNewYork) — The New York State Attorney General’s office has announced plans to sue Bank of America and Wells Fargo for violating the terms of a $26 million mortgage settlement.

Attorney General Eric Schneiderman said in a statement that the banks have failed to comply with the 2012 settlement, which required the five largest mortgage servicing banks to comply with rules for processing mortgage modification applications.

Schneiderman said he has documented 339 violations of the rules by Bank of America and Wells Fargo since October of last year.

Specifically, CBS MoneyWatch explained, Schneiderman claimed the banks failed to acknowledge receipt of loan modification applications within three business days, did not tell homeowners they were missing documents in their applications, did not give borrowers enough time to deficiencies in their applications, and did not take action on loan modification requests within 30 days.

The delays meant additional fees and interest for homeowners, and a risk of foreclosure, Schneiderman said.

“The five mortgage servicers that signed the National Mortgage Settlement are legally required to take specific, rigorous, and enforceable steps to protect homeowners,” Schneiderman said in a statement. “Wells Fargo and Bank of America have flagrantly violated those obligations, putting hundreds of homeowners across New York at greater risk of foreclosure. I intend to use every tool available to my office to hold these companies accountable under the terms of the National Mortgage Settlement.”

Schneiderman said he would take the issue to court unless a monitoring committee set up to enforce the rules takes action against the banks.

You May Also Be Interested In These Stories