Tuesday, August 21, 2012

National Mortgage (DOJ) Settlement: 10 Ways in which Big Banks Broke the Law

National Mortgage (DOJ) Settlement: 10 Ways in which Big Banks Broke the Law

On March 14, 2012 the United States of America and 49 of the 50 US states (all but Oklahoma) filed a complaint in the United States District Court for the District of Columbia against numerous mortgage loan servicers, including Bank of America, Citigroup, GMAC Mortgage/Ally Financial, JP Morgan Chase, and Wells Fargo (as well as certain subsidiaries of these mortgage loan servicers).

In a nutshell, the complaint accused these mortgage loan servicers of some pretty outrageous and ongoing misconduct relating to their origination and servicing of single family residential mortgage loans, including abuses in the foreclosure process. More specifically, Bank of America, Citigroup, GMAC Mortgage /Ally Financial, JP Morgan Chase, Wells Fargo, and the others were accused of the staggering list of wrongdoings below. Future blog posts will focus in on many of the individual abuses listed below.

  1. unfair, deceptive, and unlawful loan servicing processes;

  2. unfair, deceptive, and unlawful loan modification and loss mitigation processes;

  3. wrongful foreclosure conduct - including premature and unauthorized foreclosures;

  4. unfair and deceptive origination of mortgage loans;

  5. violations of the Direct Endorsement Program (relating to FHA loans);

  6. failure to comply with underwriting requirements;

  7. failure to comply with quality control requirements;

  8. ignoring or circumventing bankruptcy related protections and laws;

  9. violation of the Servicemembers Civil Relief Act; and

  10. the use of false and deceptive affidavits and other documents to facilitate the above violations.

We can only hope that BOA, Citi, Chase, GMAC / Ally, and WF follow the terms of the settlement, as they are obligated to, since they didn't follow the laws that they were also obligated to comply with.


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.