Florida Attorney General Pam Bondi warned Bank of America this week that she’s ready to go to court to enforce the $25 billion National Mortgage Settlement after hundreds of homeowner complaints and affronts to her own staff.
Bondi, who was a lead negotiator on the landmark agreement, said her attorneys’ efforts to help homeowners are repeatedly stymied by form letters referring them to Bank of America foreclosure lawyers. Also, she said her office is having to get involved in cases where there are common-sense solutions that should be easy to reach.
In one situation described in the letter, Bank of America allegedly refused to speak with a homeowner’s legal aid lawyer because of a “simple dispute over a ZIP code.”
“But for the intervention of my office, it is likely these borrowers would have lost their homes to foreclosure, despite their concerted efforts to obtain a loan modification or otherwise mitigate their losses by obtaining relief for which they were qualified,” Bondi wrote in her five-page letter, dated Tuesday.
Bank of America released a statement saying it has provided more mortgage relief to homeowners under the settlement than all other lenders combined and works “quickly to address any problems brought to our attention.”
Bondi’s stern words are a turnaround from a tepid response she had last month when New York Attorney General Eric Schneiderman announced plans to sue Wells Fargo and Bank of America for failing to improve timelines tied to processing loan modifications. At the time, Bondi said she was “closely monitoring compliance.”
“I am pleasantly surprised that the attorney general is taking these steps to enforce the settlement that she initially opposed,” said Royal Palm Beach-based foreclosure defense attorney Tom Ice, about Bondi’s letter. “We hope that she will continue down this track of supporting Florida homeowners.”
The National Mortgage Settlement was signed last year by Bank of America, Wells Fargo, Chase, Citi and Ally Financial as a means to atone for years of mortgage- and foreclosure-related abuses. It includes not only monetary mortgage relief to homeowners, but also a such consumer service requirements as assigning borrowers a single bank representative and restricting dual-tracking _ where a foreclosure and a loan modification are pursued simultaneously.
Bondi said those customer service issues are the reason a meeting was held Wednesday between Bank of America and a committee charged with monitoring settlement compliance.
As of May 1, she said her office has referred 293 complaints to settlement monitor Joseph Smith, the majority of which relate to servicing standards. Bank of America loans were the subject of 114 of the servicing complaints.
In one example, an 88-year-old Miami homeowner never received a response to her loan modification application and was put in foreclosure. When Bondi’s office intervened, it was told the issue was in litigation and was referred to the bank’s foreclosure attorney.
“While this response was hardly sufficient, we nevertheless followed up with litigation counsel who was neither helpful nor responsive,” Bondi said in her letter, noting that Bank of America fired the attorney and hired another who was able to resolve the issue.
In another case, a homeowner who had given her bank statements to Bank of America twice for a loan modification went to a mediation and was told the bank didn’t have all of her statements.
“Astoundingly, (the homeowner’s) bank accounts were with none other than Bank of America,” the letter states. “The mediation concluded with the lawyer for Bank of America refusing to negotiate.”
Matt Weidner, a St. Petersburg foreclosure defense attorney, said Bondi is experiencing what homeowners have dealt with for years.
“There is a consistent pattern of stonewalling and abuse,” Weidner said. “The magnitude of the ongoing abuses makes them impossible to ignore.”
The first report on bank compliance with the settlement is expected later this month, but Weidner said even if problems are found, holding banks accountable could be a lengthy process.
According to Bondi’s letter, lenders first are given time to fix violations. If someone decides to file a lawsuit, they must alert the special monitoring committee, which then has 21 days to decide whether it wants to bring the action itself. If it declines, there is another 21-day waiting period before a lawsuit can be filed.
“Time is of the essence,” Bondi wrote. “That said, if the monitor finds substantial non-compliance by Bank of America or any other settling servicer that is not timely cured, then litigation is likely the best option, and one I remain prepared to pursue.”
Borrowers can file a complaint with Bondi about the National Mortgage Settlement by calling (866) 966-7226, or on her website, myfloridalegal.com. The federal Consumer Finance Protection Bureau is also taking complaints at (855) 411-2372 or on its website, consumerfinance.gov.