Bloomberg News

Mortgage Settlement Monitor Asks for Consumer Feedback

June 06, 2012

The court-appointed monitor of a $25 billion U.S. settlement with five banks over abusive foreclosure practices said he’s hoping consumer advocates will let him know if banks aren’t complying.

Joseph A. Smith Jr., who left his position as North Carolina’s banking commissioner to take the monitoring job, said he’s set up a website where housing counselors, bankruptcy lawyers and other advocates can report problems.

“I am hopeful that we will get additional input in terms of our review of the banks’ work from out in the field,” he said in a telephone interview yesterday.

Smith said he’s working on setting up uniform standards for monitoring compliance at each bank, and has hired BDO Consulting, a division of New York-based BDO USA LLP, to help. He said he plans to hire additional outside consultants to track each bank’s progress.

The settlement agreement, filed in federal court in Washington in February, was reached after attorneys general from all 50 states announced a probe into foreclosure practices following disclosures that banks were using faulty documents to seize homes.

The nation’s five largest mortgage servicers -- Bank of America Corp. (BAC:US), JPMorgan Chase & Co. (JPM:US), Wells Fargo & Co. (WFC:US), Citigroup Inc. (C:US) and Ally Financial Inc. (ALLY:US) -- negotiated the agreement with federal agencies, including the Justice Department, and 49 states.

Borrower Relief

The banks have committed $20 billion in relief for borrowers plus payments of $5 billion to states and the federal government.

About $17 billion of the agreement will pay for mortgage debt forgiveness, forbearance, short sales and other assistance to homeowners. Servicers will also provide $3 billion in refinancing to lower homeowners’ interest rates. The settlement also sets new standards for servicing loans aimed at preventing foreclosure abuses.

Smith said he expects to get reports on the banks’ consumer relief efforts later this year. Progress reports on servicing standards will come at the beginning of next year, he said.

To contact the reporter on this story: Clea Benson in Washington at cbenson20@bloomberg.net

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • BAC
    (Bank of America Corp)
    • $18.15 USD
    • 0.17
    • 0.94%
  • JPM
    (JPMorgan Chase & Co)
    • $63.34 USD
    • 0.79
    • 1.24%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus