Mass. AG Martha Coakley says lenders violating deal
Massachusetts Attorney General Martha Coakley said the country’s largest lenders are violating parts of a $25 billion national mortgage settlement meant to help stem foreclosures by offering financial assistance and improved loan servicing for homeowners here and elsewhere.
Among other issues, Coakley alleges US lenders are failing to offer help in a timely fashion, are sending borrowers inaccurate and confusing information, and have been denying them relief without specifying why. She detailed her complains in a recent letter to Joseph A. Smith Jr., who is in charge of overseeing the national mortgage accord reached last year between 49 attorneys general and five lending companies — Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citibank, and Ally Financial Inc.
“Our office has worked aggressively to ensure Massachusetts homeowners receive the full benefit of the national mortgage settlement,” Coakley said in a statement. “We have identified violations of the agreement that we believe should be enforced by the national monitor.’’
Coakley’s complaints were made public Monday, the day Attorney General Eric T. Schneiderman of New York said he is considering suing Bank of America and Wells Fargo for failing to meet time limits set to process loan modification applications, as required by last year’s deal.
“The five mortgage servicers that signed the National Mortgage Settlement are legally required to take specific, rigorous, and enforceable steps to protect homeowners,” Schneiderman said. “Wells Fargo and Bank of America have flagrantly violated those obligations, putting hundreds of homeowners across New York at greater risk of foreclosure.”
Smith said Monday that he welcomes input from the top state regulators and that he believes lenders can do better.
“I appreciate Attorney General Coakley’s efforts to keep me informed about the issues her office is seeing,” he said. “I intend to use the enforcement powers set forth in the agreement to hold the banks accountable and look forward to further discussion of this issue after I file my compliance report in June.”
Wells Fargo spokeswoman Vickee J. Adams said the company is “committed” to complying with the settlement and has helped more than 70,000 homeowners. Adams said she was not aware of Coakley’s letter, but was disappointed with Schneiderman’s public comments.
“It is unfortunate that the New York attorney general has chosen this route rather than engage in a constructive dialogue through the established dispute resolution process,’’ Adams said in a statement.
Bank of America said it is “working closely” with the attorney general’s office to address complaints. Officials said the lender has helped more than 5,000 Bay State homeowners — providing more than $400 million in help — through the settlement program.
The other three lenders involved in the settlement could not be reached or declined to comment.
Coakley said that while Bank of America is making an effort to improve service, the company is the largest source of complaints received by her office. In her letter to Smith, she reported the state tracked 470 violations committed by Bank of America; 170 by Wells Fargo; 41 by Chase; 17 by Citi; and 9 by Ally.
“Bank of America’s review process has been riddled with inefficiencies and systemic problems and typically results in the longest delays experienced by borrowers working with this office,’’ she said.