New Whistleblower Describes How Bank of America Flagrantly Violates Dual Tracking, Single Point of Contact Requirements in State/Federal Mortgage Settlement
Remember that big, ballyhooed mortgage settlement of early last year? The one where homeowners got $25 billion of relief (well actually only around $5 billion in cold cash, but why bother with pesky details?) The one made possible by Eric Schneiderman abandoning his fellow state attorneys general to grasp the brass ring of a do-just-about-nothing Residential Mortgage-Backed Task Force? The one that would make banks clean up their act and stop using robosigned documents and deal more fairly with borrowers?
Specifically, that agreement provided for strict limits on one practice, dual tracking, and the creation of a new one, single point of contact. Both relate to mortgage modifications. Dual tracking is when a bank starts and continues to advance the foreclosure process at the same time a borrower is being considered for a modification. That play out badly for a lot of borrowers during HAMP mods, when they would receive foreclosure notices, get understandably freaked out, since they had a modification application in with their servicer, and would typically be told to ignore the foreclosure mortgages. That was bad, and perhaps deliberately duplicitous advice, since many people lost their homes that way. Single point of contact is the requirement that a bank provide one person for a borrower to deal with during the mortgage modification process.
Consent orders are seldom worth the paper they are printed on. The state/Federal settlement of early 2012 is no different. In servicing, consent orders have repeatedly been violated, in part because servicer economics favor having the banks cheat now and pay not-punitive-enough fines later, in part because their systems are so bad that it would be difficult for them to shape up even if they had a change of heart.
But according to the report of an employee who worked in the servicing area in 2011 and 2012, Bank of America has flagrantly violated its 2012 consent order with 49 state attorneys general, the Department of Justice, HUD, the Fed, Treasury, and other agencies. And one reason why may be that it is on schedule with its plans to have disposed of the servicing of virtually all Countrywide loans by the end of March. Perhaps it figured no one would be able to identify and charge it for these abuses before it handed the loans off.
Read more at http://www.nakedcapitalism.com/2013/02/new-whistleblower-describes-how-bank-of-america-flagrantly-violates-dual-tracking-single-point-of-contact-requirements-in-statefederal-mortgage-settlement.html#cAa0Fj5CM8iBkmVW.99