Someone Notices Wells Fargo is Still Cheating Homeowners

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

 

Did AG Settlement Help Homeowners? Not So Much.

One year after the attorneys general of 49 states negotiated what became known as the “National Mortgage Settlement,” are loan servicer banks more responsive to homeowners seeking to have their mortgage loans re-structured?

The settlement included 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.

Here’s what the settlement promised, according to the official website.

“The banks have agreed to major reforms in how they service mortgage loans. These new servicing standards require lenders and servicers to adhere to a long list of rights for those facing foreclosure.  For example, borrowers will have the right to see all of their loan documents to make sure any potential foreclosure is legal; they will be given every opportunity to first modify their loan before facing foreclosure; lenders and servicers will be required to have an appropriate number of well-trained staff members to promptly respond to the needs of distressed borrowers; and finally, borrowers will have the right to deal with a reliable, single point of contact so they have access to a person from whom to obtain information throughout the process.  This is very important because, throughout the foreclosure crisis, borrowers have lodged widespread complaints about their frustrations in trying to work with their lenders.” (FAQ)

So, have the banks complied? Judging from the comments on this blog, the answer is a resounding “NO!”

Despite including a “very robust enforcement mechanism,” the settlement doesn’t seem to have significantly changed the way the big banks are working with homeowners. People seeking loan mods are still being strung along for months or years sending paperwork over and over or stuck in bogus trial modification plans that trash their credit while the money disappears. The whole “single point of contact” thing doesn’t seem to be working too well, either.

Oh, and then there are the states that stuffed their settlement $$ into the general fund so homeowners got absolutely nothing after losing their homes to lies and fraud. (Yes, the AGs were complicit in that, at least in my state.)

So, if you’re one of the millions of Americans who lost your home to a questionable foreclosure over the past few years, you might want to send your state’s attorney general a big thank-you for all his or her help in bringing to justice the perpetrators and preventing the same nonsense from going on and on.

Send me a copy of your letter and I’ll post it on the blog for our fellow foreclosed homeowners to see.

Update 4/12/13: Banks Continue to Violate Nationwide Servicer Settlement
Update 6/11/13: Well, at least Florida AG Pam Bondi has noticed: Bondi gives Wells Fargo a Wednesday deadline to respond to settlement concerns