Servicers Still Not Living Up to Monitor's Mandates

Joseph A. Smith Jr., Monitor of the National Mortgage Settlement (NMS), has released a summary of five compliance reports he filed with the U.S. District Court for the District of Columbia. This summary details the results of his tests to determine Bank of America, Chase, Citi, ResCap Parties and Wells Fargo's compliance with the NMS servicing rules from Jan. 1 to June 30, 2013 , as well as actions taken to address metrics they failed in 2012. “My testing confirmed six fails in the first quarter of 2013 and one in the second quarter of 2013. The banks are all taking action to address the failures through detailed corrective action plans," Smith said. "The results I've discovered, along with the discussions I’ve had with attorneys general, counselors, advocates and distressed borrowers over the past year, have shaped four additional metrics, or tests, I recently created to ensure the banks' compliance. The semetrics address consumer concerns relating to the loan modification process, single points of contact and billing statement accuracy. I will begin testing these new metrics next year." The banks still have additional work to do in their efforts to fully comply with the National Mortgage Settlement and to regain their customers’ trust; however, I am hopeful that the corrective action plans and the new metrics will result in meaningful improvement in how the servicers treat their customers. “My colleagues and I are currently working to verify four banks’ consumer relief activities and I plan to file my final set of reports to the Court detailing my findings early next year," said Smith. "My compliance testing and reporting will continue and I look forward to sharing my findings with the Court and the public as this important process moves forward." “The Independent Monitor’s ongoing work is playing a vital role in our work to reform the servicing industry and hold it accountable for how they treat homeowners," said HUD Secretary Shaun Donovan. "While today’s report shows the National Mortgage Settlement’s compliance structure is identifying abuses and rectifying problems for consumers, it’s clear that these financial institutions still need to improve in a number of areas. In particular, the banks must do a better job sending notices and communicating with struggling homeowners in a timely manner. In the next set of reports we expect that they will have rectified these problems or they will face severe penalties.”