Five of the country’s largest banks have sent government officials a proposal of new mortgage-servicing standards they’d agree to as part of a settlement into lending abuses.
The proposal--called the “Draft Alternative Uniform Servicing Standards”--includes timelines for processing loan modifications, third-party review of foreclosures, and a single point of contact for borrowers who are struggling with their mortgages, The Wall Street Journal reports. The draft document also includes a “borrower portal,” which would allow customers to check the status of their loan modifications online.
The draft document from the banks comes at a time when federal agencies and the state attorneys general have been working to determine penalties for banks from mortgage-servicing abuses that surfaced last fall from the foreclosure “robo-signing” scandal of hastily reviewing foreclosures without proper review.
Earlier this month, the state attorneys general drafted their own proposal for a settlement with banks, including a call for banks to reduce the mortgage principal for troubled borrowers.
Yet, the banks' draft settlement does not include anything about offering principal mortgage reductions.
Representatives from the banks--Bank of America Corp., J.P. Morgan Chase & Co., Wells Fargo & Co., Citigroup Inc., and Ally Financial Inc.’s GMAC unit--will meet for the first time on Wednesday with the state attorneys general, U.S. Department of Justice, and the Department of Housing and Urban Development to discuss the settlement proposals.
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