Bank Of America and Wells Fargo Sued Over Mortgage Deal Violations By The NY AG
According to recent reports, New York Attorney General, Eric T. Schneiderman announced a new lawsuit filed against BAC (Bank of America) and WFC (Wells Fargo) for breaching and disregarding the mortgage loan modification rules in the $26 billion National Mortgage Settlement reached with the Department of Justice in 2012, nation’s 5 biggest banks and 48 states. The industry analysts are of the opinion that the attorney general of New York has taken a move that will put a huge pressure on the banks to offer principal write downs on the mortgage loans that the government regulators and banks have resisted. The industry insiders say that this will hurt the investors in the bonds that were built on those mortgage loans, including the senior citizens, institutional investors, pension funds and hedge fund investors.
As per the opinion of the AG’s office, Schneiderman aspires to sue Bank of America and Wells Fargo for continuously breaching the terms of the National Mortgage Settlement. Reports also reveal that since 2012 October, the attorney general’s office has documented almost 350 violations of standards that had been agreed by Bank of America and Wells Fargo’s last year settlement. While Wells Fargo declined to comment, Bank of America didn’t return any calls for comment. The attorney general says that he intends to ask a court to impose injunctive relief and to require strict observance and obedience under the settlement.
The $26 billion settlement with all the major banks is almost loaded with 304 servicing standards and this meant to shore up illegitimate and bad lending practices at JPM (JP Morgan Chase), C (Citibank), Bank of America and Wells Fargo as they continuously failed to offer fair and timely services to their customers. Particularly, the attorney general has accused the two ace banks of violating a total of 4 standards that dictate the timeline for banks to process the home loan modification applications. The aforementioned standards include giving borrowers an approval of loan modification within 3 business days and sending a notification to the borrowers within 5 days of their application about any kind of missing documents that might hold up the entire process.
The Attorney General of New York has pushed the FHFA or the Federal Housing Finance Agency to do something more to cut down the principal balance of the borrowers that are still unpaid and that are still held by the balance sheets of the major banks. Schneiderman has also questioned about the pace of relief provided by the Wells Fargo bank to the homeowners under the $26 billion settlement. Schneiderman has spoken with the President Barack Obama for electing Mel Watt as the fixed head of the FHFA or the Federal Housing Finance Agency, that supervises Fannie Mae and Freddie Mac. He has also asked him to replace the acting FHFA director Edward DeMarco with the new director who can allow principal relief to all those homeowners who are struggling with their mortgage balances.
Apart from the above mentioned lawsuit, Bank of America has also violated the TCPA or the Telephone Consumer Protection Act. The Florida Federal Court alleged the bank’s use of automated dialers to call on the debtors cellphones and this is considered as debt collector harassment. Not only does this breach the TCPA but also the FDCPA.
This article has been contributed by a member of Debtquotes community.