Banks keep screwing up foreclosure practices, despite agreements not to

More than a year ago, five banks agreed to pay $25 billion and improve their foreclosure practices.  Now, Bank of America, Citigroup, JP Morgan Chase, Wells Fargo and Ally Financial have been cited by federal regulators and the attorneys general of 49 states for failing to follow through with the more than 300 new foreclosure procedure standards set up in the February, 2o12 settlement.

One of the most common problems involved the banks’ demands for extensive documentation from anyone asking for a mortgage modification to prevent foreclosure. Banks often are not clear about what documents are required; do not allow enough time to get them before proceeding with foreclosure; and once they do get them, they often deny ever having received them.

The five banks agreed to improve all of these procedures as well as doing a much better job of providing good contact information for clients requesting modifications.  There have been many complaints from clients who cannot contact the same bank staffer  twice, forcing them to start from scratch every time.

The banks should have done this last time, and I am skeptical that they will do it now, but we can always hope.

Comments are closed.