ALBANY, N.Y. – New York’s attorney general on Monday accused Wells Fargo and Bank of America of violating the terms of last year’s national mortgage settlement by failing to process hundreds of refinancing requests promptly.
Attorney General Eric Schneiderman has notified the national monitoring committee established to enforce the five-bank agreement, citing complaints of 210 prompt-processing violations by Wells Fargo and 129 by Bank of America. If the committee defers taking action, Schneiderman said he will sue for compliance.
Under the settlement, the banks are required to respond to mortgage modification requests within 30 days. Schneiderman said delays put homeowners further into debt from missed payments and penalties, pushing them closer to foreclosure.
“The five mortgage services that signed the national mortgage settlement are legally required to take specific, rigorous and enforceable steps to protect homeowners,” Schneiderman said. “Wells Fargo and Bank of America have flagrantly violated those obligations.”
Bank of America spokesman Richard Simon said through March it provided mortgage relief for more than 10,000 New York homeowners totalling more than $1 billion and the bank will work to quickly address the 129 customer servicing problems Schneiderman cited.
“This agreement has been good for New York, and we continue using these beneficial programs to assist troubled homeowners in New York and nationally,” he said.
Wells Fargo declined to immediately comment.
The settlement with 49 states, the U.S. Justice Department and the lenders including JPMorgan Chase, Citigroup and Ally Financial set servicing standards and up to $25 billion in financial relief to homeowners. The standards prohibit the lenders from pursuing foreclosure while negotiating a loan modification. They require the banks to acknowledge in writing a refinancing application within three business days, notify the borrower of any missing documents within five days and make a decision on a complete application within 30 days.
In February, the attorney general’s office said 21,535 New York homeowners had received assistance, including $1.2 billion in principal reductions and refinancing that lowered interest rates on their mortgages from the five banks. However, the agency said Monday it has documented 339 violations against Wells Fargo and Bank of America since October following homeowner complaints.