NEW YORK -- Violations of a landmark mortgage settlement alleged by New York's attorney general are also widespread in California, a housing advocacy group says.
“Banks aren’t doing what they’re supposed to be doing to help people stay in their homes,” said Kevin Stein, associate director of the California Reinvestment Coalition, a San Francisco-based group that lobbies for low-income Californians.
New York Atty. Gen. Eric Schneiderman announced Monday he planned to sue Wells Fargo and Bank of America for "flagrantly" violating terms of last year's $25 billion National Mortgage Settlement.
The enforcement action would mark the first time a state's attorney general has cracked the whip on any of the five servicers that signed the settlement. In addition to BofA and Wells Fargo, JPMorgan Chase & Co., Citigroup Inc. and Ally Financial Inc. were parties to the agreement.
The settlement put in place 304 standards for mortgage servicing aimed at helping smooth the process by which homeowners can get modifications to their mortgages and prevent foreclosures.
The standards prohibit so-called "dual tracking," the practice of foreclosing even while homeowners seek a loan modification. The standards require each customer to get a single point of contact, and also mandate timelines for responses to customers seeking assistance.
“There's a lot of frustration that we don’t see compliance with the agreement and we don’t see better outcomes for homeowners who are trying to stay in their homes and for communities that are trying to stabilize," Stein said Monday.
Last month, the California Reinvestment Coalition released a survey of housing counselors and lawyers that found mortgage servicers were not living up to terms of the settlement.
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