Deadline Arrives to Adopt National Settlement’s Servicing Standards

The settlement struck between the nation's five largest mortgage servicers and the U.S. Department of Justice and 49 state attorneys general calls for reforming mortgage servicing practices with the implementation of more than 300 standards--standards that address such areas as borrower communication, single point of contact, training for loss mitigation staff, and document execution related to foreclosure actions.

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As described by the attorneys general's own negotiating committee, the banks must ""accomplish a massive undertaking"" to put all the servicing standards into practice and achieve the ""major reforms"" ordered under the agreement.

The banks--Ally, Bank of America, Citi, JPMorgan Chase, and Wells Fargo--were given 180 days from the date the settlement was approved by a federal judge (April 5, 2012) to make the changes and be in full compliance with the new servicing standards. Their deadline was October 2, 2012.

Amy Bonitatibus, a spokesperson for ""JPMorgan Chase"":http://www.jpmorganchase.com, told _MReport_ on Tuesday, ├â┬ó├óÔÇÜ┬¼├àÔÇ£We met all the 320 servicing standards as outlined in the national mortgage settlement.├â┬ó├óÔÇÜ┬¼├é┬Ø

She described it as ├â┬ó├óÔÇÜ┬¼├àÔÇ£an enormous effort,├â┬ó├óÔÇÜ┬¼├é┬Ø noting that ├â┬ó├óÔÇÜ┬¼├àÔÇ£the standards cover all aspects of the servicing business, [including] single point of contact, customer service, loss mitigation, anti-blight, and tenants rights.├â┬ó├óÔÇÜ┬¼├é┬Ø

Jumana Bauwens, a spokesperson for ""Bank of America"":http://www.bankofamerica.com, said her organization also ├â┬ó├óÔÇÜ┬¼├àÔÇ£met all servicing standards requirements on time and will meet remaining requirements under the settlement.├â┬ó├óÔÇÜ┬¼├é┬Ø

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Mark Rodgers with ""Citi"":http://www.citi.com said his company├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós mortgage servicing department is also in compliance.

Vickee Adams, a communications VP for ""Wells Fargo"":http://www.wellsfargo.com, said, ├â┬ó├óÔÇÜ┬¼├àÔÇ£[A]s of October 2, Wells Fargo has implemented all of the 320 servicing standards required under the national mortgage settlement.├â┬ó├óÔÇÜ┬¼├é┬Ø

She characterized the initiative as ├â┬ó├óÔÇÜ┬¼├àÔÇ£another significant step forward in our ongoing efforts to restore confidence in the mortgage servicing industry├â┬ó├óÔÇÜ┬¼├é┬Ø and commended Wells Fargo├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós more than 1,000 team members who worked to put the new standards in place.

According to spokesperson Susan Fitzpatrick, ""Ally├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós GMAC Mortgage"":http://www.gmacmortgage.com/ unit ├â┬ó├óÔÇÜ┬¼├àÔÇ£is working closely with the Office of Mortgage Settlement Oversight to ensure compliance with all aspects of the settlement.├â┬ó├óÔÇÜ┬¼├é┬Ø Fitzpatrick noted that compliance is ├â┬ó├óÔÇÜ┬¼├àÔÇ£subject to internal and external independent validation.""

Joseph A. Smith, Jr., the designated settlement monitor charged with ensuring all of the banks comply with the terms of the agreement, issued a statement Tuesday acknowledging the October 2 deadline for standards adoption.

├â┬ó├óÔÇÜ┬¼├àÔÇ£As of today, the five banks subject to the settlement are required to operate in full compliance with its servicing standards,├â┬ó├óÔÇÜ┬¼├é┬Ø Smith said. ├â┬ó├óÔÇÜ┬¼├àÔÇ£I will conduct careful and thorough reviews of the banks├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ó processes to assure and verify that they are compliant with the settlement├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós rules.├â┬ó├óÔÇÜ┬¼├é┬Ø

In assessing how well the servicers are adhering to the servicing standards, the settlement directs Smith to use a series of 29 defined metrics associated with such offenses as erroneous foreclosure sales, wrongful mod denials, and fraudulent affidavits. Smith plans to evaluate the third-quarter and fourth-quarter performance of each servicer against all 29 metrics beginning in the first quarter of 2013.

├â┬ó├óÔÇÜ┬¼├àÔÇ£While my team and I will work to review the banks├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ó compliance ourselves, I also need to hear from consumer professionals in the marketplace who work on these issues day in and day out,├â┬ó├óÔÇÜ┬¼├é┬Ø Smith said. ├â┬ó├óÔÇÜ┬¼├àÔÇ£I am asking these professionals to report to me when they see a mortgage servicer breaking the rules established in the settlement.├â┬ó├óÔÇÜ┬¼├é┬Ø