Wells Fargo Not Excused From Obligations Due To Hurricane Sandy - NY Attorney General
T. Schneiderman, New York State Attorney General, told Wells Fargo Bank today that
it could not use Hurricane Sandy to excuse itself "from any of its obligations
under the National Mortgage Settlement or under New York law." The warning came after Schneiderman received
word the bank had temporarily suspended review of and decisions on applications
from homeowners throughout the Northeast for mortgage relief "in order to await
further instructions from FEMA."
a letter sent today to John G. Stumpf, Wells Fargo's Chairman,
President and CEO, the Attorney General told the bank it must reverse its new
policy where it affects applications from New York homeowners "many of whom are
still struggling to recover in the aftermath of Hurricane Sandy." Schneiderman said the bank's directive likely
violates the terms of the National Mortgage Settlement which Wells Fargo and
four other major banks made with 49 State Attorneys General and the Department
of Justice. The settlement mandates
lender compliance with a number of servicing reforms, including swift review
and response timelines for borrowers seeking mortgage modifications and other
forms of relief.
Schneiderman's letter said in part, "I
am certain that you are aware that under the National Mortgage Settlement, as
well as under pre-existing NY State law, Wells Fargo is required
to adhere to strict timelines when evaluating a homeowner's request for a loan
modification. Specifically, Wells Fargo is required to make a decision about a
homeowner's loan modification request within 30 days of receiving a completed
application package. Wells Fargo's decision to delay review will likely result
in multiple violations of the National Mortgage Settlement."
He further demanded immediate
confirmation that Wells Fargo will rescind its policy and that Strumpf and his legal
representatives will take all necessary steps to communicate a retraction to
homeowners who may have been improperly denied foreclosure mitigation
said that his office had been contacted
by a number of legal service providers assisting New York State homeowners who
had received a letter from a law firm representing Wells Fargo announcing the
suspension and saying it would not respond to requests for mortgage relief
until the bank receives further information from FEMA. It is unclear why the bank felt it needed information from FEMA nor any statement
from Wells Fargo as to what exactly is was seeking
"Wells Fargo is not excused from any
of its obligations under the National Mortgage Settlement or under New York law
as a result of Hurricane Sandy," he wrote.
"My office will aggressively pursue any loan servicing company that uses
this tragic event as an excuse to violate loss mitigation decision timelines."