U.S. Banks Fall Short On 29 Rules In $25 Billion Settlement
June 19, 2013 by UPI - United Press International, Inc.
WASHINGTON (UPI) — Only one of five U.S. banks involved in a $25 billion mortgage-abuse settlement had reached every goal in the agreement, an independent monitor said.
The deal with the national mortgage lenders included the billions in financial obligations, which a report by the settlement’s appointed monitor, Joseph Smith, said have likely been fulfilled, The New York Times reported Wednesday.
But the deal also included 29 separate goals for banks to reach in how they were handling mortgages and foreclosures.
The lenders, including Bank of America, JPMorgan Chase, Citibank, Ally Financial and Wells Fargo, have reached most of the 29 goals. But Citigroup fell short on three of them, Bank of America and JPMorgan on two and Wells Fargo on one, the Times said.
Only Ally Financial made the grade on each of the 29 metrics, Smith’s report said.
Smith said he would tweak the rules, likely adding more goals to make sure the changes banks were making matched up with the intended results.
The Times said Citigroup fell short on two goals of informing borrowers of missing documents and on the goal of sending borrowers a letter with accurate information before a foreclosure.
JPMorgan flunked a goal on keeping the process of loan modifications on a prescribed timeline. It also surpassed the two-week limit it is allowed for removing forced insurance requirements on homeowners who prove they have insurance with another company, the report said
JPMorgan said it had already sent more than 2,000 checks to homeowners, as required, to make up for failing to reach that goal.
The banks said they were working to reach 100 percent compliance.
Wells Fargo said it had done an in-house review and was now in compliance. Citibank said it had already fixed one of the three problems and was working on the others.
The banks face a fine of $5 million for each failed goal but it is unlikely this will occur because generally the fines are waived unless a participant fails on five or more of the requirements, the Times said.