Summary:
In May 2013, the New York attorney-general, Eric Schneiderman, announced a lawsuit against Wells Fargo over alleged violations of the national mortgage settlement, a US$25 billion deal struck between 49 state attorneys and the five-largest mortgage servicers in the US. Schneidermann claimed Wells Fargo had violated rules over giving fair and timely servicng.
Violations of the timeline servicing standards increase the likelihood that distressed homeowners will lose their homes because the longer mortgage modifications are delayed, the deeper homeowners fall into arrears. Additional fees, penalties and interest accrue during periods of delay, making modifications more difficult and pushing homeowners closer to the brink of foreclosure.