Banks Ordered To Reimburse Homeowners
Bank of America, Wells Fargo and more than a dozen other mortgage lenders and servicers have been ordered by federal regulators to overhaul their foreclosure policies and compensate some homeowners. This all goes back to the "robo-signing" controversy last year when bank employees were caught processing reams of foreclosure documents without bothering to read them. The Federal Reserve, FDIC and other federal bank regulators investigated foreclosure practices and have now ordered large banks - including Wells Fargo and Bank of America - to reimburse homeowners who were incorrectly foreclosed upon. The banks have said there weren't many cases where that happened. Wells Fargo said in a statement it had none, but that the regulators' demands "will make mortgage servicing practices better across the board." Bank of America declined to comment. Under the agreement, banks will be required to hire auditors to see if they improperly foreclosed on homeowners in 2009 and 2010. They'll also be prohibited from foreclosing on a home when the owner has received a loan modification and is making those payments. But the federal regulators did not impose fines on the banks. That's something state attorneys general are still pushing for in their own negotiations with lenders. North Carolina Attorney General Roy Cooper is a leader in those discussions which, he says, will not be affected by yesterday's federal action. Attorneys general are holding out for much more from the banks.