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Some of the largest mortgage servicers are still fabricating documents that should have been signed years ago and submitting them as evidence to foreclose on homeowners. Several dozen documents reviewed by American Banker show that as recently as August some of the largest U.S. banks, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc., and OneWest Financial Inc., were essentially backdating paperwork necessary to support their right to foreclose.
August 31
Nearing a deal with five large mortgage servicers to settle allegations of misconduct relating to foreclosures, the Justice Department is now asking other banks that could face charges of their own if they would like to get in on the settlement.
Citing a person familiar with the matter, Reuters
The nine banks are among the 14 banks that signed consent orders with regulators in early 2011 in which they agreed to review their servicing practices after claims surfaced that they had falsified documents in order to speed up the foreclosure process. In seeking a settlement, however, the Justice Department initially focused on the five largest servicers, Wells Fargo & Co., JPMorgan Chase & Co., Citgroup Inc., Ally Financial Inc., and Bank of America Corp.
Under terms of a proposed settlement, the five largest lenders would be exempt from potential government lawsuits relating to so-called "robo-signing" abuses if they would agree to contribute up $25 billion for a fund to help distressed homeowners, according to news reports.
Observers said that the fund could grow by another $5 billion if other servicers were to join the settlement.
Reuters said that representatives of the banks either declined to comment or did not respond to requests for comment. A spokeswoman for the Justice Department also declined comment.
