How Much Entertainment Can $3.6 Billion Buy?

May 9, 2013

The National Mortgage Settlement may not be solving the housing crisis, but it’s providing plenty of entertainment.

Under the terms of the settlement, some of the country’s largest mortgage lenders are paying out $3.6 billion to former homeowners whose homes they foreclosed on.

As we previously reported, some of the checks from third-party vendor Rust Consulting have bounced.  So first homeowners were foreclosed on, then they received checks from their banks that bounced.

As a follow-up, many former homeowners received checks for the wrong amount.  According to The New York Times, Rust Consulting issued nearly 100,000 checks for less than the homeowners were owed.  There may have been a similar number of checks issued for more than the homeowners were owed, but, if so, no one’s reporting the errors.

And now, as Steve Viuker reported on Total Mortgage, New York Attorney General Eric T. Schneiderman has announced his intention to sue Bank of America and Wells Fargo for repeatedly violating the terms of the settlement.  Schneiderman’s office has documented 339 violations of the standards set by the agreement by Wells Fargo and Bank of America since October 2012.

“When it comes to customer service, the ‘Too Big To Fail’ banks often seem to be ‘Too Big to Succeed’,” according to Ken Wells, EVP-Relationship Marketing with Truebridge, Inc.

However, while the AG’s office complains about the “bureaucratic quagmire” that homeowners have to wade through as a result of the settlement, it also requires banks to comply with 304 servicing standards.  Given that banks have to comply with that many standards, it’s a wonder that Mr. Schneiderman’s office has found only 339 violations to date.



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