Days off Freddie settlement, Wells to be hit with another broadside

by Ryan Smith03 Oct 2013

Only days after Wells Fargo & Co. agreed to pay Freddie Mac an $869 million settlement, it appears another bandito is preparing to hold up the lender’s stagecoach.

New York’s top lawyer is preparing a suit against the nation’s largest mortgage lender, accusing the bank of ignoring the terms of a multi-bank, multibillion-dollar settlement aimed at preventing foreclosure abuses, according to a report by the New York Times.

New York Attorney General Eric Schneiderman is preparing to sue Wells Fargo for violating the National Mortgage Settlement, an agreement reached last year between five big banks and 49 state attorneys general, the Times reported. Under the terms of the settlement, the banks are required to comply with more than 300 servicing standards that lay out how requests from distressed homeowners should be handled.

Schneiderman claims to have found that Wells Fargo committed 210 separate violations of the agreement, involving 96 borrowers – four of whom were not even Wells Fargo customers, according to the Times. Wells Fargo has said it “disagrees with” the allegations.

“Wells Fargo has been a leader in preventing foreclosures, helping families maintain homeownership with more than 880,000 modifications nationwide and 26,000 in New York over the last four years,” bank spokesperson Vickee J. Adams told the Times.

In May, Schneiderman announced that he had found both Wells Fargo and Bank of America to be in violation of National Mortgage Settlement terms, the Times reported. While Wells Fargo denied the allegations and began to circle the wagons in anticipation of a lawsuit, Bank of America agreed to institute a raft of additional protections, which appears to have saved the lender from litigation.


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