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New York State files suit against Wells Fargo for failure to meet settlement terms

Accuses the bank of dragging its feet in assisting struggling homeowners

The state of New York has suited Bank Wells Fargo & Co. for failing to commit to terms they agreed to in a $25 billion settlement to aid struggling homeowners. New York Attorney General Eric Schneiderman has accused the bank of that failing to help struggling homeowners by intentionally delaying the negotiation of mortgage term modifications.

AG Schneiderman filed suit in a Washington federal court again both Wells Fargo and Bank of America, with a motion to enforce the terms of change that both previously agreed to. Bank of America is in the process of changing its policies to match the agreement in reaction to pressure.

"While we have brought much needed relief to thousands of New Yorkers, too many homeowners in our state are facing unnecessary challenges as they fight to keep their homes," said Attorney General Schneiderman in a press release. "While Bank of America has chosen to work with us to take the steps required to adhere to their commitments, Wells Fargo has taken a different path. Both of these cases should send a strong message that the big banks must comply with the legally binding Servicing Standards negotiated in the National Mortgage Settlement, or face the consequences."

Well Fargo has released statements rebuffing the assertion that it has dragged its feet on helping homeowners.  Vickee Adams, a spokeswoman for Wells Fargo said in a statement, “it is very disappointing that the New York attorney general continues to pursue his course, given our commitment to the terms of the national mortgage settlement.”

A settlement monitor is currently implementing new tests that will allow for a more complete assessment of whether or not the Wells Fargo and Bank of America are in compliance with the agreement.  Falling short of the goal is likely to be met with swift action from entities like Attorney General Schneiderman.

Contributing Author

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Chris DiMarco

Chris DiMarco, Associate Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...

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