Schneiderman claims BofA, Wells Fargo violated mortgage settlement terms

May 06, 2013 02:30PM

New York Attorney General Eric Schneiderman today announced his plans to sue Bank of America and Wells Fargo for allegedly violating the terms of the national mortgage settlement — the $26 billion deal that resolved wide-ranging litigation over the banks’ supposed foreclosure abuses, HousingWire reported.

The suit would be the first since the agreement was signed in October 2012, according to Schneiderman’s office.

Among the provisions of the settlement was a requirement that the nation’s five largest mortgage servicers improve customer service practices by dictating a timeline for banks to process mortgage modification applications. But Bank of America and Wells Fargo have failed to uphold the agreement in a collective 339 instances, Schneiderman claimed.

“The five mortgage servicers that signed the national mortgage settlement are legally required to take specific, rigorous and enforceable steps to protect homeowners,” Schneiderman said in a release. “Wells Fargo and Bank of America have flagrantly violated those obligations, putting hundreds of homeowners across New York at greater risk of foreclosure.”

Bank of America said they have provided relief worth $1 billion for more than 10,000 homeowners in New York through March, the company said in a statement to HousingWire.

“Attorney General Schneiderman has referenced 129 customer servicing problems which we take seriously and will work quickly to address,” the bank told HousingWire.

Wells Fargo did not immediately respond to HousingWire’s request for comment. [HousingWire]Zachary Kussin