7 Ways Banks Failed Mortgage Settlement Compliance in 2013
“My team and I tested the banks’ compliance with the National Mortgage Settlement’s original 29 metrics for the first half of this year,” said Joseph Smith, monitor of the organization, in a December 4 oversight update. “My testing confirmed six fails in the first quarter of 2013 and one in the second quarter of 2013.”
As with any massive regulatory effort, compliance with the terms of the National Mortgage Settlement hasn’t been a perfectly smooth process. The settlement was reached in February 2012, when the attorneys general of 49 states (every state except Oklahoma) and the District of Columbia reached an agreement with major banks and mortgage services to create new service standards and to provide relief to distressed homeowners.
The agreement emerged from the economically destructive fallout of the mortgage and credit crisis that, in the eyes of critics, was agitated if not outright caused by the abusive behavior of major financial institutions. It obligated the banks to provide at least $25 billion in consumer relief as settlement for claims of improper mortgage servicing practices.