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Comment by Shelli Russell on February 22, 2012 at 9:55pm

More info from the Attorney General's office...

MORTGAGE SETTLEMENT PROVIDES SERVICE STANDARDS AND MONITORING

LITTLE ROCK – Arkansas recently joined the historic settlement between Attorneys General in 49 states and the five largest mortgage lenders in the nation.  One benefit this settlement provides is long-term reform to mortgage servicing practices as well as a system for monitoring and enforcing the new standards.

 

Arkansas Attorney General Dustin McDaniel released a Consumer Alert today outlining key elements of the new servicing, monitoring and enforcement components of the settlement.  

 

“The new standards will prevent mortgage servicers from engaging in robo-signing and other improper foreclosure practices,” McDaniel said. “Banks will have to help homeowners find options first, making foreclosures a last resort. If banks don’t live up to their promises, they will face tough penalties.”

 

Earlier this month, McDaniel joined the joint state-federal settlement with Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo. The settlement will provide more than $25 billion in relief nationwide to distressed borrowers and direct payments to states and the federal government—including nearly $40 million for Arkansas.

 

New mortgage servicing standards will benefit each homeowner whose mortgage is held or serviced by any of these five banks.  The banks are required to implement the following standards:

 

-- Offer loss mitigation alternatives to borrowers before pursuing foreclosure.

 

-- Increase the transparency of the loss mitigation process.

 

-- Impose timelines to respond to borrowers involved in the loss mitigation process.

 

-- Restrict the unfair practice of “dual tracking,” where foreclosure is initiated despite the borrower’s engagement in a loss mitigation process.

 

 

The banks performance of their obligations under the settlement will be overseen by an independent
Monitor.

 

-- The Monitor will employ a staff of professionals to review the banks’ compliance.

 

-- The Monitor will issue periodic reports to the Attorneys General participating in the settlement, including notices of any potential violations.

 

-- The banks will report on their compliance in the form of agreed-upon metrics and outcome measures.  Included among the compliance metrics are testing for proper documentation of foreclosures, loss mitigation offers and proper evaluation of loan modification applications.

 

-- There will also be testing to ensure that borrowers’ account information is accurate and that any fees are properly assessed and are not excessive.