New York Attorney General, Eric Schneiderman expressed dissatisfaction over Wells Fargo and Company (NYSE:WFC)’s speed in providing relief to mortgage borrowers. The relief is part of a $25 billion settlement with the five largest mortgage lenders in the country in connection with a federal investigation.
Federal authorities alleged that the mortgage lenders including Wells Fargo & Company (NYSE:WFC), JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corp (NYSE:BAC), Citigroup Inc. (NYSE:C), and Ally/GMAC violated the law by routinely signing foreclosure related documents without the presence of a notary public. Furthermore, the lenders were accused of not evaluating if the facts written in the documents were correct.
Attorney General Schneiderman said, “We are concerned that Wells Fargo is underperforming compared to other banks. By identifying this pattern early, there is still time to address this issue and increase activity so that Wells’ customers will be afforded meaningful assistance to keep their homes.”
The state of New York gas received $1.8 billion mortgage relief from different banks under the settlement. According to the Attorney General’s office, every dollar of the relief does not directly translate into a dollar awarded under the settlement: the reason being that the relief comes in different types of assigned credits and were translated in dollar figures.
According to the Wall Street Journal, Wells Fargo & Company (NYSE:WFC) released 48,640 loans with more than 30 days delinquent. The bank provided a mortgage relief with an average amount of $76,865 to $1,051 borrowers in the state, based on data provided by the banks to an independent entity responsible in monitoring the progress of the settlement.
A spokesperson for Wells Fargo & Company (NYSE:WFC) explained, the “geographic distribution of Wells Fargo’s consumer relief and refinance activities is consistent with the distribution of our portfolio and also reflects the fact that the financial commitments under the settlement are focused on borrowers” with mortgages higher than the actual value of their homes.
Homeowners and advocates for homeowners in New York complained that they face huge obstacles when seeking mortgage relief from Wells Fargo & Company (NYSE:WFC). Homeowners complain that they are compelled to re-submit medication applications because it takes a long time for the bank to process applications and the information becomes outdated. In addition, the bank is constantly changing the point person responsible in processing the applications requiring further tests.
Joseph Smith, the person monitoring the settlement said that the settlement has built-in incentives to encourage the banks to provide mortgage relief on a timely manner. According to him, he cannot do more beyond his responsibility. He said, “It’s not my job to assess their pace of performance, which is not part of the settlement.”