Big banks fail to correct foreclosure abuses -- monitor

by Ryan Smith05 Dec 2013
Big banks are failing to comply with the terms of a government settlement to correct mortgage servicing abuses, according to the man designated to monitor the settlement.

Settlement monitor Joseph Smith Jr. said that Bank of America, Citigroup and JPMorgan Chase aren’t fully complying with the terms of the $25bn settlement, a deal reached in 2012 between the government and five big banks to end foreclosure abuses, according to a Reuters report.

Under the terms of the settlement, the banks are required to make improvements to their procedures for dealing with troubled borrowers, as well as undergo tests to measure their progress, Reuters reported.

However, Bank of America didn’t file accurate documents during bankruptcy proceedings, while Citigroup didn’t notify borrowers about missing documents within a required timeframe, Smith reported. JPMorgan, meanwhile, didn’t make decisions on some loan modification applications within a required timeframe. Smith noted, however, that JPMorgan had addressed the problem and compensated affected borrowers, according to Reuters.

“We proactively addressed the monitor's findings and are pleased that he determined that our corrective action plan is complete,” JPMorgan said in a statement.

Bank of America and Citigroup, meanwhile, said in statements that they are taking steps to remedy the problems Smith cited.


Should CFPB have more supervision over credit agencies?