Have the mortgage settlements with big banks done any good? A recent article in the Chicago Tribune reports that many people remain concerned about the ways in which mortgage servicing companies deal with customers. Indeed, the Consumer Financial Protection Bureau (CFPB) released a mortgage servicing report that identified significant problems “at banks and nonbanks alike.” So, are mortgage servicers actually interested in keeping homeowners in their homes?
According to the CFPB’s investigation, mortgage servicers continue to poorly manage loans, creating “significant issues that could cause homeowners to miss payments, threaten their credit histories and plunge them into foreclosure.” The CFPB undertakes investigations like these in order to protect consumers before they’re affected. Richard Cordray, the CFPB Director, explained in a press release that the report “highlights both the mortgage servicing problems throughout the industry and the challenges of making sure that nonbanks are following federal law. According to Cordray, “fixing both is a priority” for the CFPB.
As the market continues to recover, homeowners don’t need the added stress of worrying about whether their mortgage servicer is acting legally and ethically. If you have questions or concerns about your mortgage payments or your mortgage servicer’s practices, the experienced attorneys at the Emerson Law Firm can speak with you today.
What Are (or Aren’t) Mortgage Servicers Doing?
While the CFPB report didn’t name any specific companies, the related investigation did uncover similar problems across the board when it comes to mortgage servicing companies. According to the Chicago Tribune, these problems included: “sloppy account transfers between mortgage servicing companies, delayed payment processing, and loan servicers that continue to deal inconsistently or inadequately with homeowners who are trying to modify their homes and stay out of foreclosure.”
As a result of these recent findings, the CFPB has opened new investigations into some of these mortgage servicers. At the same time, even larger problems may be on the horizon. Based on the CFPB’s report, it looks like certain nonbanks may not have the proper procedures in place to make sure that they comply with the federal laws that have been enacted to protect consumers. And in some cases, those nonbanks have even violated those same federal laws.
More Settlement Money Paid, but More Problems
Officials who keep track of the $25 billion national mortgage settlement have reported that “the nation’s five largest servicers are close to offering the total sum of assistance they promised” back in February of 2012, according to their own records. Yet, the fact that a large sum of money has been paid doesn’t mean that mortgage-servicing problems have been solved. In fact, according to the Chicago Tribune, “while the financial portion of the settlement may be close to being met, it’s unclear whether lenders have made much progress in improving their servicing standards.”
For example, just this past June the independent monitor for the settlement, Joseph Smith, Jr., discovered that many mortgage servicers continue to create problems for lenders when it comes to loan modification processing, inquiring about bills and statements, and providing a “single point of contact at a mortgage servicer” for all consumers.
This news comes at about the same time as an important 9th U.S. Circuit Court of Appeals ruling. The Court reversed a lower court holding concerning two loan modification claims against Wells Fargo & Co. Now, those cases will proceed, and they’re arguing that Wells Fargo illegally denied permanent HAMP mortgage modifications to homeowners who completed all the necessary steps.
If you have concerns about avoiding foreclosure or getting a mortgage modification, contact an experienced foreclosure defense attorney today to discuss your case.
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