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New York AG Warns Wells Fargo to Rescind Loan Mod Delay Policy

In a letter, New York Attorney General Eric T. Schneiderman accused Wells Fargo of using Hurricane Sandy to evade obligations under the ""national mortgage settlement"":http://www.dsnews.com/articles/robo-signing-settlement-finalized-2012-02-09.

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According to the attorney general's ""letter"":http://www.ag.ny.gov/pdfs/Wells_Fargo_Company_Letter_November_16_2012.pdf, a law firm representing Wells Fargo released a letter stating the bank will suspend ""all Home Preservation reviews and decisions"" as a result of Hurricane Sandy. The attorney general says the letter from Wells Fargo further states the bank ""will not respond to requests for mortgage relief until you receive further information from FEMA."" The letter applied to decisions in the Northeast.

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""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 wrote. ""My office will aggressively pursue any loan servicing company that uses this tragic event as an excuse to violate loss mitigation decision timelines.""

The $25 billion mortgage settlement was reached in February between state and federal officials and the five largest servicers--Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial.

As part of the settlement agreement, ""Wells Fargo is required to make a decision about a homeowner's loan modification request within 30 days of receiving a completed application package. Wells Fargo's decision to delay review will likely result in multiple violations of the National Mortgage Settlement,"" the attorney general's letter stated.

The letter was addressed to the CEO of Wells Fargo and demands the bank ""immediately rescind"" the policy and ""comply with its obligations without interruption.""

About Author: Esther Cho

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