Is Wells Fargo living up to its end of $25 billion mortgage servicing deal?

by MPA04 Feb 2015
A federal judge has rejected allegations by New York Attorney General Eric Schneiderman that Wells Fargo was violating the $25 billion mortgage settlement the U.S. Justice Department reached with five banks in 2012.

According to U.S. District Judge Rosemary Collyer, Schneiderman failed to provide enough evidence that Wells Fargo neglected its servicing obligations under the terms of the settlement. In 2013, the attorney general accused Wells Fargo of not meeting timeline requirements for loan modifications requested by struggling homeowners.

Under the 2012 deal with 49 state attorneys general, the lender, along with JPMorgan, Bank of America Corp, Citigroup Inc. and Ally Financial, agreed to pay billions in help to homeowners and reform their mortgage servicing operations in order to atone for abuses in processing foreclosures as the housing market collapsed, according to Reuters

The allegations cover 97 of the estimated 450,000 mortgages Wells Fargo services in New York area—or about 0.022%, Collyer stated in her judgment. She added that the settlement "does not require absolute perfection in loan servicing." 



 

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