WASHINGTON Dec 4 Top U.S. banks including Bank
of America and Citigroup Inc failed to comply with
some provisions of a government settlement to improve mortgage
servicing practices, a monitor of the settlement said on
Bank of America failed to file accurate documents in
bankruptcy proceedings and Citi's mortgage unit, CitiMortgage
Inc., failed to notify borrowers about missing documents within
30 days of a request for a short sale, the monitor, Joseph Smith
The two banks have submitted plans to fix those problems,
and are in the process of fixing earlier failures, he said.
The problems stem from a $25 billion deal between federal
and state authorities and five top mortgage servicers, designed
to end foreclosure abuses, in 2012.
Under the settlement, Bank of America, Citi, JPMorgan Chase,
Wells Fargo and ResCap were required to improve their processes
to deal with struggling borrowers and submit to dozens of tests
that measure their improvement.
One bank, Wells Fargo, did not fail any tests in 2013,
according to Smith's report.
While Smith said in a statement that the banks still have
additional work to do, he said he was hopeful the fixes would
improve how the servicers treat their customers.
JPMorgan failed in some instances in 2013 to make decisions
on borrower applications to modify loans within a timetable
required, and it failed a test that measures whether loans were
delinquent at the time a foreclosure was initiated, according to
But Smith said both problems were not widespread, and
JPMorgan had since fixed the problems and compensated harmed
In October, Bank of America and Wells Fargo pledged to
improve communications with borrowers seeking to modify their
loans, after authorities found additional problems not covered
by the 2012 deal.
One state - New York - accused Wells Fargo in federal court
of breaching the terms of the $25 billion deal and said the bank
did not go far enough in its commitments. That dispute is