- The largest U.S. mortgage servicers, including Citigroup Inc (C). and Bank of America Corp., haven’t done enough to upgrade their treatment of customers in danger of foreclosure, according to a court-appointed monitor.
To meet the terms of a legal settlement with the U.S. Justice Department and 49 state attorneys general, the monitor said in a report released [this week], the banks must improve their response to loan-modification requests and their collection of records, and provide a single point of contact for borrowers. The settlement over botched foreclosures requires the banks to submit plans to the monitor for improving their performance.
“I want to send a simple message to these banks that it’s time for them to live up to their end of the deal by complying with all aspects of the settlement,” Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said on a conference call with reporters.
Donovan, who helped negotiate the February 2011 settlement, called the banks’ performance “unacceptable” and said federal and state authorities would fine or “haul them back into court” if they failed to improve their treatment of borrowers seeking mortgage relief.
The banks were required to meet new servicing standards as part of the accord, which came about after disclosures that they used faulty documents to seize homes.