By Aruna Viswanatha
WASHINGTON Dec 4 Top U.S. banks, including Bank
of America Corp and Citigroup Inc, failed to fully
comply with a government settlement to correct mortgage
servicing abuses, a monitor of the settlement said on Wednesday.
Bank of America failed to file accurate documents in
bankruptcy proceedings, and Citi's mortgage unit failed to
notify borrowers about missing documents within 30 days of a
request for a short sale, the monitor, Joseph Smith Jr., said.
The two banks have submitted plans to fix those problems and
are in the process of correcting earlier failures, he said.
JPMorgan Chase & Co was also cited in Smith's report.
The problems stem from a $25 billion deal between federal
and state authorities and five top mortgage servicers in 2012
designed to end foreclosure abuses.
Under the settlement, Bank of America, Citi, JPMorgan, Wells
Fargo & Co and Residential Capital LLC were required to
improve their procedures for dealing with struggling borrowers.
They were also required to submit to dozens of tests to measure
In a statement, Bank of America said it has "worked
diligently" to comply with the terms of the settlement and to
ensure struggling borrowers know they are being treated fairly.
The problems with the bankruptcy filings were limited to one
quarter and impacted a "relatively small population," the bank
said. It also said none of the problems resulted in inaccurate
foreclosures or improper denials of requests to modify loans.
Citigroup said in a statement that it "remains committed to
fulfilling the terms" of the settlement. It said it became aware
of certain problems last May and took steps to fix them.
Wells Fargo did not fail any tests this year, according to
Smith said in a statement that while the banks still have
additional work to do, he was hopeful the fixes would improve
how borrowers are treated.
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 a
pre-foreclosure notice sent to customers was accurate, according
to the report.
Smith said those problems were not widespread at the bank
and that JPMorgan had fixed the problems and compensated harmed
A JPMorgan representative said in a statement, "We
proactively addressed the monitor's findings and are pleased
that he determined that our corrective action plan is complete."
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