Regulators Warn Banks Not to Flout $25 Billion Foreclosure Deal

September 12, 2013
Bloomberg BusinessWeek  
mortgage lending news

Major U.S. banks that agreed to pay $25 billion last year to settle claims of abusive foreclosure practices pledged to stop seizing homes from borrowers who were pursuing mortgage modifications. With some lenders apparently ignoring this promise, the Consumer Financial Protection Bureau said it is working to complete proposed changes to pending mortgage-servicing rules aimed at cracking down on this process, known as dual-tracking.

Set to take effect in January, the new regulations would apply to all lenders -- including those, like Ocwen and Nationstar, that did not join the national settlement. Joseph Smith, the court-appointed monitor of the 2012 foreclosure settlement, said he also is preparing to start measuring how well banks are communicating with borrowers about loan-workout applications.

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