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Daily Real Estate News  |  March 29, 2011  |   Banks Suggest Changes to Mortgage Servicing
Five of the country’s largest banks have sent government officials a proposal of new mortgage-servicing standards they’d agree to as part of a settlement into lending abuses.

The proposal--called the “Draft Alternative Uniform Servicing Standards”--includes timelines for processing loan modifications, third-party review of foreclosures, and a single point of contact for borrowers who are struggling with their mortgages, The Wall Street Journal reports. The draft document also includes a “borrower portal,” which would allow customers to check the status of their loan modifications online.

The draft document from the banks comes at a time when federal agencies and the state attorneys general have been working to determine penalties for banks from mortgage-servicing abuses that surfaced last fall from the foreclosure “robo-signing” scandal of hastily reviewing foreclosures without proper review.

Earlier this month, the state attorneys general drafted their own proposal for a settlement with banks, including a call for banks to reduce the mortgage principal for troubled borrowers.

Yet, the banks' draft settlement does not include anything about offering principal mortgage reductions.

Representatives from the banks--Bank of America Corp., J.P. Morgan Chase & Co., Wells Fargo & Co., Citigroup Inc., and Ally Financial Inc.’s GMAC unit--will meet for the first time on Wednesday with the state attorneys general, U.S. Department of Justice, and the Department of Housing and Urban Development to discuss the settlement proposals.

Source: “Banks Offer Own Mortgage-Servicing Plan,” The Wall Street Journal (March 25, 2011)


Read more:
State Attorneys General Fight Lending Abuses


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