New York State Attorney General Eric Schneiderman on Wednesday dropped the hammer on the nation’s biggest mortgage lender.
Schneiderman filed a lawsuit against San Francisco-based Wells Fargo, alleging that its efforts to comply with a sweeping 2012 mortgage-servicing settlement are simply “not good enough.”
The move against the big bank, which has a big presence in metro area, marks the first significant legal action against a big bank under the $25 billion, 49-state mortgage settlement reached last year.
Bank of America, which like Wells was warned last May of possible legal action if it didn’t straighten out its act, agreed to changes in the way it helped homeowners modify their mortgages and was not sued, Schneiderman said.
Wells took a different route.
“Their communication with customers is terrible,” Schneiderman said, speaking of Wells Fargo.
“[Wells Fargo is] not providing the right folks with the ability to close a deal.”
Schneiderman’s complaint comes roughly 20 months after five of the nation’s largest mortgage servicers — JPMorgan Chase, BofA, Wells Fargo, Citigroup and Ally Bank — agreed to the $25 billion settlement with a coalition of state attorneys general and federal regulators over robo-signing and various other shoddy mortgage servicing issues.
Wells Fargo continues to engage in “widespread breaches of its most basic obligations under the consent judgment that have harmed and continue to harm thousands of New York families,” Schneiderman states in the complaint, filed in a Washington, DC, court.
Wells Fargo’s mortgage process is “byzantine,” the AG said.
In legal papers, he went one step further, referring to homeowners’ dealings with Wells Fargo as “Kafkaesque.”
A Wells Fargo spokeswoman said in a statement that the bank is disappointed that Schneiderman has filed a lawsuit.
“We are doing everything we can to help our customers remain in their homes, and over the last four years have completed more than 880,000 loan modifications nationwide, including 26,000 modifications for borrowers in New York,” the statement said.