Attorney General Peter F. Kilmartin today reported on the nation's five largest mortgage service providers' compliance with the servicing standards required by the national mortgage settlement.
Under the terms of the national mortgage settlement, the mortgage service providers must comply with 304 servicing standards, in addition to providing billions of dollars in actual relief to injured homeowners. Joseph A. Smith, Jr., the settlement monitor, is required to validate compliance and report his findings to state attorneys general and the United States District Court for the District of Columbia. The Monitor's reports cover the third and fourth calendar quarters of 2012, from July 1, 2012 through December 31, 2012.
The report shows that there are lingering problems with servicer performance, which are primarily related to single points of contact, dual tracking, the loan modification process and the accuracy of customers' account information.
"The Monitor's report reflects what we continue to hear from Rhode Island homeowners – the banks continue to engage in the behavior that led this country into the housing crisis. While the national mortgage settlement has brought significant financial relief to many homeowners, there is still much work to be done by the banks to correct past bad practices," said Attorney General Kilmartin. "We will continue to hold the banks to the terms of the settlement until they are in compliance with each and every servicing standard. Shoddy and negligent service for years by the banks was a significant factor in the collapse of the housing market. We cannot allow the banks to fail to use the utmost diligence when they are working on mortgage relief for homeowners."
If found to be deficient in servicing standards, the mortgage service provider must develop a corrective action plan approved by the settlement monitor to fix the related practice. If deficiencies continue, the Monitor may seek civil penalties and fines up to $5 million.
According to the most recent financial reports on the banks' progress, through March 31, 2013, approximately 2,064 homeowners in Rhode Island had received relief in the form of first and second lien modification forgiveness, short sales, principal refinancing and other forgiveness programs, with an aggregate amount of relief/benefit of $150 million, or an average benefit of $72,708 per homeowner. The report also showed that approximately 1,000 additional homeowners were in the approval and/or trial phase of first lien modification relief programs.
Attorney General Kilmartin urges homeowners who are having difficulty with any of the mortgage service providers that are party to the settlement - Bank of America, Chase, Citi, ResCap Parties (formerly Ally/GMAC) and Wells Fargo – to contact the Consumer Protection Unit. Complaints received by the Consumer Protection Unit are forwarded to the mortgage service provider for response and to the settlement monitor for tracking. In addition, the Consumer Protection Unit can refer homeowners to available foreclosure prevention resources.
About the Office of Mortgage Settlement Oversight More information about the National Mortgage Settlement is available at www.nationalmortgagesettlement.com. Further information about Joseph Smith and the Office of Mortgage Settlement Oversight is available at www.mortgageoversight.com.
About the Office of the Attorney General Consumer Protection Unit The Office of the Attorney General Consumer Protection Unit investigates and mediates consumer complaints concerning unfair and unlawful business practices and misleading advertising arising out of alleged violations of the Deceptive Trade Practices Act. If groups of people are victimized by a deceptive trade practice, this office may file in the Superior Court a civil investigative demand, which is a formal investigation. In appropriate cases, a lawsuit to stop the illegal business practice may be initiated.
Apart from carrying out its statutory responsibilities, the Unit also provides information and referral services to the general public. Consumers are directed to the appropriate governmental or private agencies for help in answering specialized questions or resolving disputes that are not within the Unit's jurisdiction.
The Consumer Protection Unit is available to speak to community groups on how to prevent being a victim of identity theft and other scams. To contact the Consumer Protection Unit, please call 401-274-4400 or visit www.riag.ri.gov.