Last year, major mortgage servicers, including J.P Morgan Chase, Bank of America, and Wells Fargo, signed an agreement with 49 state attorney generals whereby they agreed to improve their loan servicing standards and help provide some much needed relief to distressed borrowers. Under the terms of the agreement, the banks are required to assess their performance, aided by 29 different metrics. The first round of analyses are in and the results are show a variety of violations.
The worst infractions involved servicers failing to adhere to timelines intended to force banks to make determinations on loan modification applications and maintain borrower notifications. Bank of America failed to provide accurate information in their Notice of Intent to Foreclose and failed to notify borrowers of missing documents in loan modification applications within 5 days. Similarly, JPMorgan, CitiMortgage, and Wells Fargo also failed to meet notice requirements and maintain timelines for loan modification applications.
Servicers who failed the tests are required to come up with ways to correct the violations. If they fail to do so, enforcement action may be taken through the courts and seek penalties of up to $5 Million. It may also be possible for the settlement monitor to require the banks to provide some financial relief to borrowers affected by the violations.
photo credit: woodleywonderworks via photopin cc