* Delays may violate mortgage settlement - attorney general
* Bank says actions misinterpreted, it is helping customers
By Rick Rothacker
Nov 16 New York Attorney General Eric
Schneiderman on Friday warned Wells Fargo & Co that the
U.S. bank's policy to delay mortgage modification decisions in
states affected by Hurricane Sandy likely violates a national
But the No. 4 U.S bank by assets said its actions were being
misinterpreted and that it was simply taking steps to make sure
customers received the help they needed.
Schneiderman said his office has been contacted by lawyers
representing homeowners in New York who have been notified by
the bank that it is suspending decisions on loan modifications
until it receives information from the Federal Emergency
Under a $25 billion settlement reached in February, Wells
Fargo and four other banks agreed to new loan servicing
standards, including a requirement to make decisions on loan
modification requests within 30 days of receiving a completed
application. Loan modifications typically reduce monthly
payments for borrowers in danger of foreclosure.
"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," Schneiderman wrote in a letter to
the bank. "My office will aggressively pursue any loan servicing
company that uses this tragic event as an excuse to violate loss
mitigation decision timelines."
Wells Fargo simply added a step of checking in with
customers in hurricane-affected areas to make sure the
information in their modification applications was still
accurate, said Michael DeVito, the bank's head of mortgage
default servicing, in an interview.
The bank is aware of the national mortgage standards and
plans to comply with them, he said, adding: "Our first concern
is to make sure these customers are getting the right relief,
the full relief that's available to them."
Immediately after Sandy made landfall, Wells Fargo began
suspending all foreclosures in FEMA declared disaster areas, the
bank said. The suspension will last at least 90 days for loans
owned by the bank. Loans serviced for others will follow
Wells Fargo has scheduled a meeting with Schneiderman's
office for next week, DeVito said.
"We'll continue to work...to clarify our actions and why we
believe it's in the best interest of the constituents and
customers in New York," he said.
Wells Fargo is the largest U.S. mortgage lender.