R.I. AG comments on mortgage settlement compliance report

By Bryan Cohen | Jun 21, 2013

PROVIDENCE, R.I. (Legal Newsline) -- Rhode Island Attorney General Peter Kilmartin responded Wednesday to a recently-released compliance report of the nation's five largest mortgage service providers with the National Mortgage Settlement.

Joseph Smith Jr., the monitor of the settlement, issued a report earlier this week that found there are lingering problems with the mortgage servicers in their compliance with servicing standards laid out in the settlement.

Kilmartin said the report shows that Wells Fargo, Citi, Chase, Bank of America and ResCap Parties, formerly known as Ally/GMAC, are continuing to engage in bad practices.

"The monitor's report reflects what we continue to hear from Rhode Island homeowners -- the banks continue to engage in the behavior that led this country into the housing crisis," he said in a statement. "While the National Mortgage Settlement has brought significant financial relief to many homeowners, there is still much work to be done by the banks to correct past bad practices.

"We will continue to hold the banks to the terms of the settlement until they are in compliance with each and every servicing standard. Shoddy and negligent service for years by the banks was a significant factor in the collapse of the housing market. We cannot allow the banks to fail to use the utmost diligence when they are working on mortgage relief for homeowners."

The report found there are still issues with servicer performance that affect the loan modification process, dual tracking, single points of contact and the accuracy of customers' account information.

If the mortgage servicers are found to be deficient in servicing standards, the providers must develop a corrective action plan approved by the monitor. If the issues continue, the monitor can seek civil penalties and fines up to $5 million.

Kilmartin urged Rhode Island homeowners having difficulty with any of the five servicers to contact his Consumer Protection Unit.

The settlement provided about $150 million in relief and benefits to homeowners in the state through March 31.

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