Bank of America and Wells Fargo may be headed back to court in New York. According to a news item on CNBC, the New York Attorney General is preparing a lawsuit against these two heavyweight mortgage lenders for multiple violations of the historical National Mortgage Foreclosure Settlement Agreement of 2012.
The complaint filed by Attorney General Eric Schneiderman states that Bank of America and Wells Fargo have engaged in conduct that resulted in 339 violations of the settlement agreement. Under the terms of the settlement, the five major mortgage lenders and servicers in the U.S., which also include Ally Financial, Citi and JP Morgan Chase, promised to never again engage in dubious and fraudulent practices such as robo-signing and dual-tracking.
Schneiderman held a press conference to explain that the violations he intends to prosecute are flagrant. Compliance with the settlement agreement is being monitored by a team led by Joseph A. Smith, the former Banking Commissioner of North Carolina. The monitoring team receives thousands of complaints against the banks by clients who bemoan their banks' lack of compliance with the settlement agreement.
Even though the complaints and alleged violations give consumers many reasons to be concerned, the settlement agreement has benefited hundreds of thousands of borrowers by saving them from foreclosure with mortgage loan modifications.
The NY Attorney General later appeared on MSNBC and told viewers that the U.S. Department of Justice will also review the banks' less-than-stellar compliance with the settlement agreement. Schneiderman had very strong words for the banks, chastising them for their confidence that in believing that the rules do not apply to them.
Schneiderman is just one public official interested in holding big banks accountable for their transgressions. In recent weeks, Senators Carl Levin (D-Mich.) and Sherrod Brown (D-Ohio) have voiced their exasperation at the too-big-to-fail doctrine that has prevailed in the American economy since 2008. The NY Attorney General and the Senators believe that the time has come to hold top executives responsible for their actions.
Although Bank of America seems to forever be under the negative spotlight, its number of alleged violations this time is actually less than Wells Fargo's. Bank of America will have to answer to 129 violations while Wells Fargo will face 210 complaints.