(The following is a reformatted version of a press release
issued by New York Attorney General Eric T. Schneiderman and
received via e-mail. The release was confirmed by the sender.) 
October 2, 2013 
Deal Gives Bank Of America 120 Days To Implement Systemic
Changes To Ensure Compliance With Terms Of The National Mortgage
Schneiderman: Big Banks Face Clear Choice - Comply With
Servicing Standards Outlined In National Mortgage Settlement And
Treat New Yorkers Fairly, Or Face Real Consequences 
NEW YORK - Attorney General Eric T. Schneiderman today announced
that he is suing Wells Fargo so that a federal judge will compel
the bank to honor its commitments under the 2012 National
Mortgage Settlement. At a press conference in New York, Attorney
General Schneiderman also announced that his office has reached
an agreement to suspend a similar enforcement action against
Bank of America, which has agreed to implement a robust set of
systemic reforms intended to ensure that the servicing standards
outlined in the National Mortgage Settlement are honored across
New York State. If the reforms are successful, it is anticipated
that Bank of America will replicate this initiative nationwide. 
“While we have brought much needed relief to thousands of New
Yorkers, too many homeowners in our state are facing unnecessary
challenges as they fight to keep their homes,” said Attorney
General Schneiderman. “While Bank of America has chosen to work
with us to take the steps required to adhere to their
commitments, Wells Fargo has taken a different path. Both of
these cases should send a strong message that the big banks must
comply with the legally binding Servicing Standards negotiated
in the National Mortgage Settlement, or face the consequences.” 
When implemented, the agreement reached with Bank of America
will correct many of the underlying issues that have prevented
full compliance with the National Mortgage Settlement. The
agreement leaves open the option to resume legal action against
Bank of America if it fails to comply with the new terms. 
The National Mortgage Settlement includes 304 Servicing
Standards that participating servicers are required to adhere
to, and which include standards that are intended to make it
easier for homeowners to seek loan modifications. The Servicing
Standards were incorporated into the National Mortgage
Settlement to address longstanding complaints from consumers and
advocates that servicers subject to the Settlement- Ally
Financial/GMAC, JP Morgan Chase, Citibank, Bank of America and
Wells Fargo--consistently failed to provide fair and timely
services to their customers. 
Attorney General Schneiderman announced in his intention to sue
Wells Fargo and Bank of America in May, after documenting
hundreds of violations of the servicing standards outlined in
the National Mortgage Settlement. 
Violations of the timeline servicing standards increase the
likelihood that distressed homeowners will lose their homes
because the longer mortgage modifications are delayed, the
deeper homeowners fall into arrears. Additional fees, penalties
and interest accrue during periods of delay, making
modifications more difficult and pushing homeowners closer to
the brink of foreclosure. 
Under the terms of the new agreement, Bank of America has
committed to: 
-Designate high-level staff with decision-making authority to
every housing counseling and legal services agency that is part
of the Attorney General’s Homeowner Protection Program. The
senior Bank of America staffers will work with these agencies to
reach prompt resolution on all pending or delayed loan
modification requests. 
-In consultation with the Office of the Attorney General, Bank
of America will redesign its “missing documents” letter to
ensure that this communication is clear, and that borrowers know
exactly what information is needed to move forward with a loan
modification request. 
-Bank of America will stop transferring the servicing rights to
third parties on New York mortgages when borrowers are already
in negotiations for a loan modification with Bank of America
staff or are making trial payments on a loan modification. 
-Bank of America will grant borrowers’ attorneys permission to
negotiate loan modifications with Bank of America staff
directly, as opposed to the bank’s outside foreclosure lawyers,
who typically are far removed from the loan modification and
loss mitigation process. 
The agreement makes clear that if Bank of America fails to fully
comply with these terms, the Attorney General reserves the right
to resume legal action. 
These efforts in New York initiated by Attorney General
Schneiderman are complimentary to work being carried out
nationally by the members of the National Mortgage Settlement
Monitoring Committee. Though the roles and method for
enforcement are different, all parties are working toward the
same goal of holding mortgage servicers accountable and bringing
about expedited relief for homeowners who continue to struggle
in the wake of the foreclosure crisis. 
The Attorney General gave ample time to Wells Fargo to agree to
similar reforms, but after months of negotiations, the bank
declined to sign any agreement aimed at improving its customer
service practices. 
“Wells Fargo’s violations of the servicing standards has been
documented by direct service providers across New York State,”
said Kirsten Keefe of the Empire Justice Center. “Wells Fargo’s
refusal to commit in writing to common-sense reforms that every
mortgage servicer should be following already is sad and
shameful. Wells Fargo’s business practices are hurtful to its
customers who should be getting resolutions but will continue to
suffer frustrations with litigation pending.” 
Christie Peale, Executive Director of the Center for New York
City Neighborhoods, said, “Since the beginning of the financial
crisis, New Yorkers struggling to pay their mortgages have had
to navigate byzantine processes to save their homes. It is
gratifying to see Bank of America commit to these meaningful
changes that will deliver resolution and relief to homeowners
who have been stuck in limbo for too long. Homeowners and their
advocates have long called for good faith negotiations with
banks--and for a true partner in government to ensure those
negotiations are honored. New Yorkers are incredibly lucky to
have such a partner in Attorney General Eric Schneiderman.” 
“Despite the clear servicing standards outlined in the National
Mortgage Settlement, too many Wells Fargo customers still must
navigate months of needless delay, lost paperwork and wrongful
denials in trying to obtain an affordable, sustainable mortgage
modification,” said Meghan Faux of South Brooklyn Legal
Services. “We applaud AG Schneiderman for his aggressive
enforcement of the National Mortgage Settlement and his
leadership in bringing transparency and fairness to mortgage
servicing. Accountability to the servicing standards is critical
to preventing wrongful foreclosures and the housing crisis.” 
“For too long, homeowners in New York and around the country
have been struggling as the big banks fail to honor the
commitments they made in the National Mortgage Settlement,” said
Ira Rheingold, Executive Director of the National Association of
Consumer Advocates. “Every day that a struggling homeowner has
to go back and forth with their mortgage servicer is a day they
fall further behind and a day closer to needlessly losing their
home.  I am pleased that Bank of America has agreed in writing
to take real steps to adopt systemic changes that will help them
honor their commitments, and applaud Attorney General
Schneiderman for taking Wells Fargo to court to get them to do
the same.” 
The violations of the servicing standards were documented by the
network of legal service providers and housing counselors funded
under the Homeowner Protection Program (HOPP) created by
Attorney General Schneiderman in June 2012. Using a portion of
the funds New York State received under the terms of the
National Mortgage Settlement, the Attorney General committed $60
million over three years to 35 legal services organizations and
59 housing counseling agencies statewide. 
HOPP counselors provide at-risk homeowners with a range of
services, including direct advocacy with lenders, financial
counseling and assistance in preparing the complex documentation
that homeowners need in order to submit applications for loan
modifications, an outcome that usually results in lower monthly
mortgage payments and prevents foreclosures from going forward
but which can take more than a year to negotiate. 
Homeowners in need of assistance should contact the Attorney
General’s foreclosure prevention hotline at 1-855-HOME-456 or
visit www.AGHomeHelp.com. 
The case is being handled by Assistant Attorneys General Adam
Cohen, Brian Lasky, and Melissa O’Neill in the Consumer Frauds
Bureau, under the supervision of Deputy Bureau Chief Laura
Levine, Bureau Chief Jane Azia and Executive Deputy Attorney
General for Economic Justice Karla G. Sanchez, with assistance
from Dina Levy, Special Assistant to the Attorney General. 
New York City Press Office / 212-416-8060
Albany Press Office / 518-473-5525
Twitter: @AGSchneiderman 
(sgp) NY 
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