N.Y. AG presses Wells Fargo in wake of Hurricane Sandy

NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman warned Wells Fargo on Friday to reverse a new policy temporarily suspending mortgage relief application reviews for New York homeowners.

Schneiderman said that the bank's directive to suspend home preservation reviews and decision to await instructions from FEMA violates the National Mortgage Settlement. Many homeowners in New York are attempting to recover in the aftermath of Hurricane Sandy.

In March, 49 state attorneys general, the Department of Justice and the five largest mortgage servicing companies in the nation, including Wells Fargo, reached a settlement that requires lender compliance with multiple servicing reforms. One such reform is fast review and response timelines for borrowers seeking mortgage modifications and other types of relief.

"Wells Fargo is not excused from any of its obligations under the National Mortgage Settlement or under New York law as a result of Hurricane Sandy," Schneiderman said. "My office will aggressively pursue any loan servicing company that uses this tragic event as an excuse to violate loss mitigation decision timelines."

In a letter to John G. Stumpf, the chairman, president and CEO of Wells Fargo, Schneiderman said that his office will not allow the bank to use the damage of Hurricane Sandy to evade the settlement's obligations.

"Countless families in New York have suffered tremendously because of this natural disaster," Schneiderman said. "As we work to help those affected rebuild their lives, my office expects Wells Fargo's full cooperation in ensuring that no additional and unwarranted damage is inflicted on those who were victims of this tragic event."

Schneiderman requested swift and immediate consideration from Wells Fargo related to the urgent matter.