Most major banks need better compliance with settlement laws

Four of the five major banks that reached a multi-billion dollar settlement with most state Attorney Generals and the U.S. Department of Housing and Urban Development last year regarding brazenly inappropriate foreclosure practices are still not in total compliance with lending regulations.

http://video.cnbc.com/gallery/?video=3000176905

"It's [compliance is] better than it was. It's not as good as it needs to be, and we're going to keep at it," Joseph A. Smith, the National Mortgage Settlement's monitor, said in an interview with
CNBC.

The new lending regulations require that Bank of America, Wells Fargo, Chase, CitiMortgage, and ResCap (the former GMAC) to follow certain home loan standards. Banks are required to use their own employees, as well as work closely with National Mortgage Settlement agents. The loan regulations aim to reduce foreclosure errors and improve the number of loan modifications.

In a recent study conducted by the National Mortgage Settlement, ResCap was the only bank in complete compliance with the new regulations.
The worst errors consisted of timeliness issues in loan modifications. Other errors included failing to notify customers that important documents were missing from files in a timely fashion.

“This is unacceptable and today I want to send a simple message to these banks. Today is time to live up to the deal[,]” Shaun Donovan, secretary of the Department of Housing and Urban Development, told the Chicago Tribune.

Banks improved compliance in the latter half of 2012.

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