Morgan Stanley, American Home in Mortgage Servicing Accord With New York
Morgan Stanley (MS) and two mortgage- servicing companies reached agreements with New York’s banking regulator intended to reform their foreclosure practices.
Morgan Stanley, American Home Mortgage Servicing Inc. and Vericrest Financial Inc. agreed to mortgage-servicing changes aimed at “troublesome and unlawful practices that have plagued” the industry, the Department of Financial Services said in a statement today.
The changes include ending the practice of referring a borrower to foreclosure while the homeowner is pursuing a loan modification, and stopping so-called robosigning, in which foreclosure documents are signed without verification of the facts, according to the statement.
Mary Claire Delaney, a spokeswoman for New York-based Morgan Stanley, said in an e-mail that the company is pleased to have reached the accord with the state regulator.
Morgan Stanley’s Saxon Mortgage Services Inc. is also included in the agreements, according to the Department of Financial Services. Morgan Stanley has agreed to sell Saxon to Ocwen Financial Corp. (OCN)
American Home spokeswoman Philippa Brown said the Coppell, Texas-based company supports efforts to establish best practices for residential mortgage servicers.
“Industrywide standards are essential to assure accuracy, speed and fairness as we work with borrowers who are struggling to make mortgage payments,” she said in an e-mailed statement.
A representative of Oklahoma City-based Vericrest couldn’t be reached for comment.
The deals announced today don’t preclude investigations of past practices or release any claims, the Department of Financial Services said. The department previously reached mortgage-servicing agreements with Goldman Sachs Group Inc.’s Goldman Sachs Bank, Ocwen Financial and Litton Loan Servicing.