Three mortgage servicers have voluntarily entered an agreement with the ""New York State Department of Financial Services"":http://www.dfs.ny.gov/ in which they pledge to abide by upgraded mortgage servicing standards that ensure fairness for all borrowers.[IMAGE]
The agreement was forged Thursday between Superintendent Benjamin M. Lawsky and Morgan Stanley and its Texas-based servicer, ""Saxon;"":https://www.saxononline.com/common/home/ ""American Home Mortgage Servicing,"":https://www.ahmsi3.com/servicing/home.asp also based in Texas; and ""Vericrest Financial,"":https://www.vericrestfinancial.com/NoAuth/Default.aspx?ReturnUrl=%2fAccountInfo.aspx based in Oklahoma.
The standards agreed to are the same standards previously ""agreed"":http://www.dsnews.com/articles/ny-approves-goldman-sachs-sale-of-litton-with-stipulations-2011-09-01 to by Goldman Sachs Bank and Ocwen Financial to facilitate the sale of Litton Loan Servicing to Ocwen. Ocwen has also entered into an agreement to purchase Saxon from Morgan Stanley.
According to the agreement, the three servicers will end the illegal practice of robo-signing and prevent such practices in the future; end ""dual tracking,"" the practice of pursuing a foreclosure while a borrower is applying for a modification or loss mitigation; and provide a single point[COLUMN_BREAK]
of contact for all borrowers in foreclosure or pursuing a loan modification.
However, the agreement does not prevent any investigations of past servicing practices, nor does it provide any release of claims or actions.
""Today's agreements are an important step forward in cleaning up some of the mortgage industry's most troubling practices,"" Lawsky said. ""These new reforms are now spreading out into the industry at a time when homeowners truly need relief in the wake of the financial crisis.""
""Strong standards like these Servicing Practices are needed so that regulators like the DFS can hold servicers truly accountable through the examination process and the Department's enforcement mechanisms,"" Lawsky added.
The agreement also received praise from others in the industry, including the programs director of the Consumers Union, Chuck Bell, who said, ""These new agreements establish critically-needed protections for homeowners facing foreclosure, by ending unfair and illegal practices that interfered with borrowers' rights.""
He went on to say, ""[T]he New York State Department of Financial Services is proving that New York is going to impose tough, but fair rules for mortgage servicing. These agreements create a better, more predictable business environment for both lenders and consumers.""
Additionally, Josh Zinner, co-director of the Neighborhood Economic Development Advocacy Project, voiced his praise, stating, ""We strongly support efforts by the Department of Financial Services to hold the mortgage servicing industry accountable.""