Your mortgage lender is still behaving badly.
Four of the five banks that agreed last year to correct foreclosure and mortgage modification abuses are still not living up to their word, a report out yesterday found.
The abuses at JPMorgan, Wells Fargo, Citigroup and Bank of America , in part, centered around the mishandling of loan paperwork, according to the report by Joe Smith, the monitor charged with overseeing the 49-state, $25 billion mortgage abuse settlement deal struck just last year.
“My testing through the end of last year resulted in three testing fails, and I can disclose five additional fails in 2013,” Smith’s report stated. “These results demonstrate that the settlement is allowing us to uncover areas in which more work needs to be done,” he noted.
Smith noted failures at JPMorgan Chase tied to the use of so-called force-placed insurance, in which homeowners are forced to take on expensive insurance policies, oftentimes with affiliates of their mortgage lender.
The four banks, in separate statements, said they are working with the monitor to comply with the mortgage settlement terms.
The Smith report comes a month after New York Attorney General Eric Schneiderman threatened to sue Wells Fargo and BofA for what he identified as 339 violations of the settlement.
Schneiderman said he would delay pursuing a lawsuit against the two banks to allow Smith to complete his testing.
“I think what people don’t realize is that this is a tremendously monumental task for banks to comply with the mortgage settlement,” said financial executive Christopher Whalen, managing director at Carrington Investment Services.
Smith found no abuses at ResCap, the fifth bank to sign the settlement.