Wells Fargo, Bank of America commit to improved loan modification process
WASHINGTON, D.C. – October 2, 2013 – (RealEstateRama) — The five mortgage servicers included in the National Mortgage Settlement must better address loan modifications, single points of contact with borrowers and billing statement accuracy under four new servicing standard tests, the settlement Monitor announced today.
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Additionally, as a result of the ongoing oversight efforts of Attorney General George Jepsen and other members of the settlement’s Monitoring Committee, Wells Fargo and Bank of America have committed to further improvements to their loan modification processes beyond the settlement’s requirements.
“The banks’ continued problems communicating with borrowers regarding the documents needed to process loan modifications have jeopardized the real progress made since the settlement was announced,“ Attorney General Jepsen said. “Over the past several months, the Monitoring Committee met with the banks to share homeowner complaints and issues of concern, and we made numerous suggestions for improvement to the banks.”
The Monitor’s new tests, or metrics, will impose greater oversight on JP Morgan Chase, CitiGroup, Wells Fargo, and Bank of America under the settlement. Joseph A. Smith, Office of Mortgage Settlement Oversight Monitor, announced the metrics, which measure the banks’ compliance with the settlement’s servicing standards. The new metrics will:
• Afford homeowners 30 more days to respond to requests for additional documents before they may be referred to foreclosure or sale.
• Test whether servicers specify the reason for a loan modification denial in their communications with homeowners.
• Evaluate the effectiveness of the servicers’ single points of contact who are responsible for assisting homeowners.
• Ensure the accuracy of monthly billing statements sent to homeowners.
As a result of ongoing discussions, Wells Fargo and Bank of America have sent separate letters to the Monitoring Committee to memorialize commitments they have made to improve their loan modification procedures by:
• Reducing multiple requests for documentation.
• Refining and enhancing customer communication regarding missing information.
• Conducting an early underwriting review for customers with potentially complex financial circumstances.
• Providing an improved escalation process for customers experiencing multiple documentation or clarification requests.
“The improvements Wells and Bank of America have agreed to make have the potential to build upon the requirements of the National Mortgage Settlement to make sure the path to a loan modification is working for Connecticut homeowners,” said Attorney General Jepsen. “We plan to continue discussions to ensure distressed homeowners receive a fair and prompt review when applying for a loan modification.”
Banks continue to offer loan modifications and other relief to qualified customers. The Attorney General encouraged any Connecticut homeowner having difficulty with their mortgage to call 1-877-472-8313, the state Department of Banking’s Foreclosure Assistance Hotline, to learn about state and federal help available. They should also contact their loan servicers to discuss the possibility of achieving an affordable loan modification or other foreclosure alternative.
Assistant Attorneys General Joseph Chambers and Matthew Budzik, head of the Finance department, are working with the Attorney General on this matter.
Please click here to view the letter from Wells Fargo.
Please click here to view the letter from Bank of America.
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Media Contact:
Jaclyn M. Falkowski
jaclyn.falkowski (at) ct (dot) gov
860-808-5324 (office)
860-655-3903 (cell)
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attorney.general (at) ct (dot) gov
Facebook: Attorney General George Jepsen
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