Big bank fails two mortgage settlement tests

by MPA17 Dec 2014
Bank of America has failed two of 31 mortgage settlement tests aimed at seeing whether the bank is complying, according to a report from an independent watchdog. The failed tests include sending pre-foreclosure letters to borrowers and notifications to people seeking mortgage modifications.

The report from Monitor Joseph Smith measures compliance of mortgage servicers involved in a 2012 settlement with the U.S. Justice Department and 29 state attorneys general. The settlement required the country’s five largest lenders to pay a total of $25 billion to customers in the form of short sales or loan forgiveness and improve their servicing standards.

Results from the test means Bank of America has to implement a plan to correct the behavior. If the bank fails tests on the same metrics again, it could face penalties, according to the Charlotte Observer.

In an interview with the Observer on Monday, Smith attributed Bank of America’s failure of its two tests in part to changes the bank had to make internally to comply with the Consumer Financial Protection Bureau’s new mortgage servicing standards, which took effect in January during the latest testing period.

He said the bank was required to modify its IT systems to reflect the new rules, but updating a system leaves room for mistakes. “The fact that they had to ... revise their systems created the opportunity for error.”

Citigroup was the only other lender in Tuesday’s report to fail a test.
 

COMMENTS

  • by Cheryl M | 12/17/2014 11:49:12 AM

    Funny this article only mentions BofA. What about JP MORGAN CHASE? In fact, they too are doing the same thing, not complying with settlements and the CFPB knows it. So has there been additional comment from the CFPB about Chase? ANYONE....

  • by Mike D | 12/17/2014 12:15:34 PM

    Big Deal!!! Minor infractions on the banks behalf. As if the homeowners didnt know that their house wasnt going to be foreclosed because they were not making their payment. Thats the problem, this admin doesnt hold the consumer accountable, you dont make your monthly payment you dont get to keep your house, regardless how many notices you get, all they know is that they are coming for it. CFPB is a rogue agency that can do whatever it wants with ZERO oversight.

  • by gheinecke | 12/17/2014 2:06:33 PM

    What about JP Morgan Chase, OCWEN and EVERBANK (should be called NEVER BANK) to say nothing of Wells etc. Could go on and on guess they have better lobbyists.

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