Banks Failed to Comply With $25 Billion Settlement Related to Foreclosure Abuse

Banks Failed to Comply With $25 Billion Settlement Related to Foreclosure Abuse

The country’s three largest banks, Bank of America, JPMorgan Chase & Co. and Citigroup Inc. are refusing to cooperate with standards required for dealing with mortgage customers. These standards were agreed to as part of a $25 billion settlement based on foreclosure abuse allegations.

According to the Office of Mortgage Settlement Oversight, Bank of America failed three of the 29 metrics designed to test compliance with 304 mortgage standards, in the first quarter of the year. JPMorgan Chase & Co. and Citigroup Inc. each failed two of the standards.

One measure failed by all three banks concerned supplying adequate notification to customers that foreclosure proceedings were beginning. Additional issues by at least one bank were associated with timely decisions on requests for modifications of monthly payments and short sales.

All around, the three banks failed six metrics in the first quarter of the year and one in the second quarter.

Needless to say, that doesn’t indicate improvement. Banks that failed a metrics were required to formulate a plan to resolve the problems. Banks were not tested on that metric in the second quarter while those plans were being implemented.

The banks must meet the new servicing standards as part of the $25 billion settlement. The settlement requires lenders to provide $25 billion in relief to consumers through principal reductions, short sales and other measures.

Last month, four new metrics were added which include; ensuring banks provide a single point of contact for mortgage problems to avoid runarounds, confirming monthly bills are accurate and instituting procedures for customers seeking mortgage loan modifications.

 

 

 

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