Wednesday was report card day for the five largest banks that agreed to a $25 billion settlement with the 49 attorneys general, but they received mostly incomplete scores from the government-appointed monitor passing out the grades.
Joe Smith, the monitor, released a report on Bank of America, JP Morgan Chase, CitiMortgage Inc., ResCap Partiers (formerly GMAC) and Wells Fargo. The banks were tested during two separate periods: July 1-Sept. 30 and Oct 1. to Dec. 31. According to a report by Smith last month, the banks have reported distributing $50.6 billion in direct relief to more than 620,000 homeowners through the settlement.
Smith found that the banks failed eight servicing standards they agreed to in the settlement, mostly related to processing loan modifications, a sure sign that the banks aren’t providing enough staff to manage the cases.
The banks did pass the majority of the standards they were tested on, but they weren’t tested on all of the 29 areas outlined in the settlement because of delays in providing documents and agreed upon services. Bank of America was tested on only a dozen, Chase on only 11, CitiMortgage on 15, ResCap on 11, and Wells Fargo on 20.
The incomplete gaps led to some considerable holes in reporting. For instance, Bank of America has come under fire in Florida and other states for not providing timely documents or alerts during the foreclosure process. In a June 6 letter, Florida Attorney General Pam Bondi slammed Bank of America and threatened to sue over the bank’s alleged failure to modify mortgages in an efficient manner.
Of the 17 categories Bank of America wasn’t tested on were two addressing this very issue.