Deal Gives Bank Of America 120 Days To Implement Systemic Changes To Ensure Compliance With Terms Of The National Mortgage Settlement
Schneiderman: Big Banks Face Clear Choice – Comply With Servicing Standards Outlined In National Mortgage Settlement And Treat New Yorkers Fairly, Or Face Real Consequences
NEW YORK – Attorney General Eric T. Schneiderman today announced that he is suing Wells Fargo so that a federal judge will compel the bank to honor its commitments under the 2012 National Mortgage Settlement. At a press conference in New York, Attorney General Schneiderman also announced that his office has reached an agreement to suspend a similar enforcement action against Bank of America, which has agreed to implement a robust set of systemic reforms intended to ensure that the servicing standards outlined in the National Mortgage Settlement are honored across New York State. If the reforms are successful, it is anticipated that Bank of America will replicate this initiative nationwide.
“While we have brought much needed relief to thousands of New Yorkers, too many homeowners in our state are facing unnecessary challenges as they fight to keep their homes,” said Attorney General Schneiderman. “While Bank of America has chosen to work with us to take the steps required to adhere to their commitments, Wells Fargo has taken a different path. Both of these cases should send a strong message that the big banks must comply with the legally binding Servicing Standards negotiated in the National Mortgage Settlement, or face the consequences.”
When implemented, the agreement reached with Bank of America will correct many of the underlying issues that have prevented full compliance with the National Mortgage Settlement. The agreement leaves open the option to resume legal action against Bank of America if it fails to comply with the new terms.
The National Mortgage Settlement includes 304 Servicing Standards that participating servicers are required to adhere to, and which include standards that are intended to make it easier for homeowners to seek loan modifications. The Servicing Standards were incorporated into the National Mortgage Settlement to address longstanding complaints from consumers and advocates that servicers subject to the Settlement- Ally Financial/GMAC, JP Morgan Chase, Citibank, Bank of America and Wells Fargo-consistently failed to provide fair and timely services to their customers.
Attorney General Schneiderman announced in his intention to sue Wells Fargo and Bank of America in May, after documenting hundreds of violations of the servicing standards outlined in the National Mortgage Settlement.