Wells Fargo and Bank of America are in the news for failing to comply with the provisions of last February’s National Mortgage Settlement and maybe someone is finally going to stand up for homeowners.
For anyone still out there fighting to keep the foreclosure-frenzied loan servicers from taking a house, it comes as no surprise that these two banks have not been following the guidelines detailed in their agreement with 49 of the 50 state attorneys general.
It’s not as if anyone is still expecting to get any of the $26 billion that was supposed to provide direct help to wrongfully foreclosed homeowners. Most of that was
stolen appropriated to plug holes in the states’ budgets.
But the settlement emphasized a number of servicing standards that should have been very helpful to homeowners seeking loan modifications to avoid losing their homes to foreclosure. Among those was a requirement that loan mod applications be reviewed in 30 days, a specific mandate that borrowers be assigned a single knowledgeable contact person to work with them through the review process and provisions that limit the process known as “dual-tracking” whereby banks race to complete foreclosures whilst dragging out loan mod reviews.
(Never mind that HAMP and at least one of the big pretender-lenders, Freddie Mac, included most if not all of these items in their guidelines for loan mods starting as early as 2009 and the banks have summarily ignored them in favor of protracted delaying tactics.)
What may seem surprising is that the two banks only failed to comply with one or two of the requirements as measured by the Office of Mortgage Settlement Oversight, which is supposed to be keeping track of the banks’ progress at finally implementing systems to deal with loan mod reviews in a timely and professional manner.
Or, maybe not so surprising. If the OMSO is anything like the other faux oversight agencies, the banks “self-report” their level of compliance and this self-serving data is taken as accurate. Right. Because no bank would ever lie about its treatment homeowners, most of whom it discarded as customers the second their mortgage loans were sold to “investors,” who then became clients of the banks’ “mortgage servicing” tentacles.
The OMSO website mentions a number of “metrics,” or tests, but doesn’t tell us from whence the data to fuel them comes. The agency’s FAQ page is pretty vague on the subject. “Specifically, the Monitor will receive and review periodic reports from the banks, and will then make his own determinations and findings as to the banks’ compliance with the settlement.”
Despite this blatant cheerleading by HUD Secretary Shaun Donovan, it sounds to me like this is another of those idiotic “self-policing” programs in which the banks assert they are doing everything they can to help homeowners while in reality they’re stringing people along with ridiculous delaying tactics.
I think New York AG Eric Schneiderman has a better idea of the scope of the problem, but even his citation of more than 200 violations of the settlement standards sounds low to me, notwithstanding that the settlement excluded a vast majority of borrowers in the first place by excluding loans “owned” by the big government-supported entities Freddie Mac and Fannie Mae.
But at least the NY AG is pursuing some course of punitive action. Maybe. Let’s hope this isn’t just another psuedo-investigation for show to be followed by another toothless “no admission of wrongdoing” settlement that somehow fails to provide meaningful restitution to those the banks have cheated.
Time will tell whether the efforts of Monitor Smith or AG Schneiderman will have any effect at all in reining in the banksters’ foreclosure free-for-all.
Update June 28, 2013: How disappointing. Turns out Schneiderman has rolled over for the banksters.
BofA, Wells Fargo Won’t Face Mortgage Deal Enforcement Case