Four out of the nation’s five largest servicers — Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo — are failing to comply with servicing rules set forth in the $25 billion national mortgage settlement reached last year, according to a report released Wednesday by Joseph A. Smith Jr., the settlement’s court-appointed monitor.
Smith’s office used 29 metrics to test how well the five servicers were following the settlement’s 304 servicing standards. Citigroup fared the worst, getting failing marks for three metrics, followed by Bank of America and Chase with two failing marks, and Wells Fargo with one failing mark. Only ResCap, formerly Ally Financial, passed all metrics.
The most common problem among the servicers, particularly Citigroup, Bank of America and Wells Fargo, was the failure to notify homeowners of any missing documents in their loan modification requests within five days of receipt, the Washington Post reported. Citigroup and Bank of America were also cited for providing inaccurate information to borrowers before initiating a foreclosure, the paper said.
“These results demonstrate that the settlement is allowing us to uncover areas in which more work needs to be done. The banks are now working to correct these errors and will be tested again to determine their level of improvement,” Smith said in a statement.
