Four banks failed to meet at least one of the 29 loan-servicing criteria they agreed to under last year’s $25 billion settlement over mortgage abuses, such as a requirement that borrowers be notified of any documents missing from their applications in a timely manner, the New York Times reported today. The settlement requires that borrowers be notified within five days and given 30 days to supply the missing paperwork. “I think what you see is there’s still a communication problem,” said Joseph A. Smith Jr., the monitor. “If there’s a unifying feature, it’s that the servicers who failed these things are not yet communicating effectively.” The banks report their own performance on the 29 criteria, and their findings are then tested in a random sampling by outside groups. Citibank failed three metrics, two of which involve notifying borrowers of missing documents in a timely fashion and one that requires a letter containing accurate information be sent to a homeowner before foreclosure. Bank of America failed two metrics, one regarding missing documents and the other regarding the pre-foreclosure letter. Wells Fargo also flunked on the missing documents. JPMorgan Chase failed to adhere to the prescribed timeline for reviewing loan modification requests and notifying customers of its decision. It also failed to remove home insurance policies known as forced-place insurance within two weeks of a homeowner’s submitting proof that he or she had insurance.
