Banks under fire for loan modification failures
A state-level Attorney General is says he will file a lawsuit against the nation’s largest and most powerful banks if they do not come into compliance with the recent settlement agreement over unfair foreclosure practices.
The prosecutor says that he has gotten over 300 complaints from people in his state who say that the banks are moving slowly and purposefully dragging their feet in responding to requests for loan modifications. Under the terms of the settlement, the nation’s largest banks have an obligation to respond to requests in a more timely manner and to keep records updated so that homeowners are not facing foreclosure even after they have successfully obtained a modification.
The settlement has already provided hundreds of thousands of homeowners with relief from foreclosures and short sales by compelling banks to cooperate with qualified borrowers. As we have discussed previously on this blog, the banks have also recently begun issuing payments for those who have already suffered from a wrongful foreclosure because of robo-signing practices.
Unfortunately, within several months of the agreement between banks and regulators that led to the settlement, consumers were reporting that banks were still displaying the same bad behavior and sketchy business practices that led to the initial investigation of robo-signing.
Borrowers have a right to fair treatment by banks and not to suffer from a foreclosure when they would be able to make payments with a reasonable loan modification. Homeowners who are struggling to come to an agreement with their banks because of inconsistent information or un-updated records can seek assistance from an experienced foreclosure prevention attorney.
Source: Washington Post, “N.Y. to sue Bank of America, Wells Fargo over violations of mortgage deal,” Danielle Douglas, May 6, 2013.