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Boxer Urges Investigation of Reported National Mortgage Settlement Violations

U.S. Senator Barbara Boxer

U.S. Senator Barbara Boxer (D-CA) today urged federal officials to launch an investigation of reports that banks are failing to comply with the terms of the National Mortgage Settlement (NMS), and to take action to ensure that banks live up to their legal obligations to consumers.

In a letter to NMS Monitoring Committee members Attorney General Eric Holder, Secretary of Housing and Urban Development Shaun Donovan and National Mortgage Settlement Monitor Joseph Smith, Senator Boxer wrote, “I am extremely concerned over reports that banks continue to violate the rights of homeowners and the terms of the National Mortgage Settlement (NMS). As a condition of the NMS, participating banks agreed to ensure certain basic consumer protections in exchange for legal relief. However, while the banks have been relieved of that legal uncertainty, struggling homeowners continue to face a seemingly patchwork system that leaves them at risk of losing their homes.”

Senator Boxer expressed concern with the results of a survey of California housing counselors – representing hundreds of thousands of borrowers – who reported that big banks were frequently failing to implement reforms in the NMS designed to protect borrowers from foreclosure while negotiating a modification and ensure that banks communicate clearly with borrowers and respond to applications for loan modifications in a timely manner. The survey also found that banks continue to lose documents and improperly deny qualified homeowners – especially those in vulnerable populations – the opportunity to remain in their homes.

“I strongly urge you to investigate the violations reported in this survey and to hold the banks accountable by taking strong enforcement actions,” Senator Boxer wrote. “Too many Californians already have lost their homes unnecessarily during the foreclosure crisis due to bank malfeasance or error. It is essential that you take swift action to ensure that the banks are meeting their obligations under the terms of the settlement and that struggling homeowners receive the assistance they need.”

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