NEARLY 60,000 COMPLAINTS IN 6-MONTH PERIOD
The monitor of the National Mortgage Settlement (MNS), Joseph A. Smith, Jr., released a report last week that uncovers banks’ failings to comply with the $25 billion settlement. That settlement, reached February 2012, was with Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo. In his report, former North Carolina Banking Commissioner Smith wrote “Over the past six months my team and I have tested the banks’ compliance. My testing through the end of last year resulted in three testing fails, and I can disclose five additional fails in 2013. These results demonstrate that the Settlement is allowing us to uncover areas in which more work needs to be done.”
Smith’s report includes “These findings, combined with the complaints I have heard from attorneys general, counselors and distressed borrowers, tell me there is still work to be done. Specifically, I have heard regularly in the last year about issues with the loan modification process, single points of contact and billing and statement inaccuracies.”
Smith is now negotiating more stringent testing with the banks to better address those issues. In his report, the banks’ failings are:
Bank of America received a failing for “Pre-foreclosure initiation” and “Loan modification document collection timeline compliance”
Chase received a failing for “Loan modification decision/notification timeline compliance”
Citi received a failing for “Pre-foreclosure initiation” and “Short sale document collection timeline compliance” and “Loan modification decision/notification timeline compliance”
Wells Fargo received a failing for “Loan modification document collection timeline compliance”.
Ally/GMAC is now known as ResCap (Residential Capital). (GMAC was taken over by Ally, Ally went into bankruptcy May 2012.) ResCap did not receive any fail marks.
During the period between October 1, 2012 and March 31, 2013 there were 59,586 complaints made against the banks. Below are complaints that were made, there were:
– 12,340 complaints of “Single point of contact was not provided, was difficult to deal with or was difficult to reach”
– 7,620 complaints that the “Single point of contact was non-responsive”
– 6,127 complaints that the “Bank failed to update borrower’s contact information and/or account balance”
– 4,587 complaints that the “Bank foreclosed on borrower after borrower submitted an application for loan modification/loss mitigation”
– 4,205 complaints that the “Bank did not take appropriate action to remediate inaccuracies in borrower’s account”
– 3,586 complaints that the “Bank requested financial statements that borrower already provided”
– 3,050 complaints that the “Bank did not accept payments or incorrectly applied them”
– 2,851 complaints that the “Bank was unresponsive during the short-sale process”
– 2,703 complaints that the “Bank failed to correct account information”
– 2,464 complaints that the “Bank took too long to advise borrower of deficiencies in their submission”.
According to the NMS, the checks to borrowers who submitted valid claims were mailed out beginning June 10th and mailing was completed by June 17th, 2013. The average payment amount for each loan was approximately $1,480.
The NMS was a joint state-federal settlement made with the five largest mortgage servicers and was to provide relief to distressed borrowers and direct payments to states and the federal government. The agreement settled state and federal investigations finding that these mortgage servicers routinely signed foreclosure related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct. Both those practices violated the law. The settlement provides benefits to borrowers whose loans they service.
Consumers should file complaints with the Consumer Financial Protection Bureau and their state’s Attorney General.
Keith A. Gantenbein, Jr. is a Colorado consumer advocate attorney, foreclosure defense and real estate attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes: foreclosure prevention, foreclosure assistance, loan modifications, short sales, and all other foreclosure defense legal assistance. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, debt defense, debt harassment, contracts and landlord/tenant. If you think you will be facing debt collection, foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.