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Breaking Legal News & Current Events

Banks May Be Close to Settlement with Attorneys General

Bank of America, J.P. Morgan Chase and Wells Fargo are said to be approaching a settlement with the states' Attorneys' General over the mortgage foreclosure crisis centered around the robo-signing scandal according to a report by the Washington Post today.

According to other reports, Senators pressed banking officials at a Senate Banking Committee hearing yesterday in Washington. Executives from Bank of America and Chase were urged to stop the "dual-track" process in which homeowners have loan modification applications pending with their lender while at the same time the bank moves forward with foreclosure proceedings. 

The complications from this dual-track system has been highlighted in several consumer class action lawsuits over the alleged mishandling of the loan modification process by CitiMortgage, Bank of America and Wells Fargo. The litigation in those class actions is still ongoing.

Barbara Desire, a mortgage executive from Bank of America, told the Committee that in some cases the investors that own the mortgages require a dual-track approach. (For information about the "securitization" of mortgage products by "investors" click here). However, she also claimed that the bank is interested in working with the Attorneys General on possible reforms to the practice.

Desire repeatedly testified that the bank focuses on ways to keep homeowners in their homes whenever possible; although many consumers might disagree with this representation based on their own personal experiences.

Though Tuesday's hearings were brought about over the scandal surrounding "robo-signers" and the filing of false affidavits in foreclosure proceedings, much of the Attorneys' General investigation has centered around whether consumers have been getting a fair shot at the federal loan modification program under the HAMP guidelines. At the hearing, Senators brought along actual complaints from constituents who have struggled to land loan modifications from their lender.

Although talks between the parties have been seemingly fruitful, all reports seem to indicate that any formal settlement might be months away.

Sources: The Washington Post, The Charlotte Observer


   

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