Magazine article American Banker

Mortgage Monitor More Fixes to Banks' Foreclosure Practices

Magazine article American Banker

Mortgage Monitor More Fixes to Banks' Foreclosure Practices

Article excerpt

Byline: Chris Cumming

The monitor of the national mortgage settlement plans to force the five largest servicers to fix billing and communications problems that have plagued homeowners and been the subject of tens of thousands of complaints.

Joseph Smith, the monitor of the settlement, issued four new tests that the servicers will have to pass in order to comply with the terms of the 2012 agreement, which overhauled national servicing standards and required the servicers to provide $25 billion in relief to affected homeowners. The changes are a response to homeowner complaints about shoddy billing practices, poor communications and widespread dual-tracking, said Smith in a release Wednesday.

The tests will require the servicers to provide homeowners with a single point of contact at the company, and to put in place systems to monitor single-point-of-contact communications. The servicers will also be required to ensure that their monthly billing statements are accurate and comprehensive, that they do not reject a borrower's loan-modification request while the borrower is responding to requests for additional documents, and that they properly communicate to borrowers when a loan-modification request has been turned down.

The monitor has set new testing metrics that each of the five banks will have to meet. The testing will begin next year.

"I have met with attorneys general, counselors, other advocates, and distressed borrowers in 10 states over the past year," said Smith in a news release. …

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