New York AG: Big Banks Are Violating $26B Mortgage Settlement

What's Hot


How to Cut the Cable TV Cord in 2017Family

8 Major Freebies and Discounts You Get With Amazon PrimeSave

8 Creative Ways to Clear ClutterAround The House

Study: People Who Curse Are More HonestFamily

This Free Software Brings Old Laptops Back to LifeMore

Pay $2 and Get Unlimited Wendy’s Frosty Treats in 2017Family

Protecting Trump Will Cost Taxpayers $35 MillionFamily

The 3 Golden Rules of Lending to Friends and FamilyBorrow

6 Reasons Why Savers Are Sexier Than SpendersCredit & Debt

Resolutions 2017: Save More Money Using 5 Simple TricksCredit & Debt

Porta-Potties for Presidential Inauguration Cause a StinkFamily

Tax Hacks 2017: Don’t Miss These 16 Often-Overlooked Tax BreaksTaxes

5 New Year’s Resolutions That Will Pay Off 10 Years From NowCollege

New York Attorney General Eric Schneiderman says he's preparing to sue Bank of America and Wells Fargo.

New York Attorney General Eric Schneiderman has accused two major lenders of “flagrantly” violating requirements of the $26 billion National Mortgage Settlement regarding how banks must respond to mortgage modification requests, The Associated Press says.

Wells Fargo has violated the standards 210 times and Bank of America 129 times, he said.

Under the settlement, the five participating lenders (JPMorgan Chase, Citigroup and Ally Financial are the others) must respond to mortgage modification requests within three business days, identify any missing documents and notify borrowers within five days, and make a final decision within 30 days, among other rules.

Delays could push homeowners closer to foreclosure, Schneiderman said. He reported the complaints to the committee overseeing the settlement and said he’ll sue if they don’t act.

Here’s how The New York Times described one of the complaints:

Michael Farnsworth, who fell behind on his mortgage after a spinal injury prevented him from working, is among the New York residents claiming that their mortgage paperwork was not handled properly. After submitting a loan modification application to Wells Fargo on Feb. 22, Mr. Farnsworth said he returned home on March 6 to find a note affixed to his farmhouse in Corfu, N.Y.

The note was ominous, he said: Mr. Farnsworth had 48 hours to resubmit many documents, including tax returns, or his loan modification would be scuttled. Under the mortgage settlement, though, Wells Fargo was required to notify Mr. Farnsworth about missing documents five days after he submitted a loan application and to then give him 30 days to submit any missing documentation.

A Bank of America spokesman said the bank handled mortgage relief for more than 10,000 New Yorkers through March and will quickly address the complaints. A Wells Fargo spokesman said it has helped more than 70,000 homeowners nationally and criticized the attorney general for not using “the established dispute resolution process.”

Last week, the Massachusetts attorney general’s office also complained, citing recurring similar issues as well as mistaken or contradictory notices being sent to borrowers.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: 10 Overlooked Expenses That Ruin Your Budget

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,768 more deals!