ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Banks Accused of Violating Loan Modification Settlement

Updated on October 18, 2015

Banks Allegedly Try to Evade Loan Modification Rules

Just as law firms that focus on foreclosures cut back their staffing, new evidence that banks are acting in bad faith with real estate loan modifications could generate more business for them.

The recession that started in 2007 was prompted by irresponsible lending practices by big banks, whose loose credit requirements led to widespread foreclosures.

A Justice Department lawsuit against Bank of America, Countrywide and other lending institutions led to a $25 billion settlement in which they agreed to modify the loans of customers hurt by their lending practices.

However, a new media report shows lenders are violating the settlement and rules by the Consumer Financial Protection Bureau to prevent another financial meltdown, according to a report by The Legal Forum (

In some cases, banks are demanding excessive paperwork from customers to avoid loan modifications or promising to help them while secretly trying to foreclose on their homes, according to a report by Politico. The excessive paperwork often includes repeated demands for the same information or requirements to fill out forms that are not needed for loan modifications.

Although the report is bad for consumers, it could mean law firms can expand their real estate litigation and foreclosure practices.

North Carolina Attorney General Roy Cooper summed up the 2012 settlement by saying, If homeowners get the runaround for a modification, if homes are foreclosed before other options expire, the monitor and the courts can step in and make it right.

A trend first noted in the courts last year shows homeowners appear to be getting the runaround Cooper described.

Since early 2014, borrowers have filed more than 60,000 complaints about lenders hurrying to foreclosure on them or mishandling modification requests.

In July of this year, more than 469,000 U.S. homeowners were in some stage of foreclosure and another 1.3 million in serious delinquency, according to real estate data firm CoreLogic.

The House Oversight Committee is beginning to look at whether lenders are complying with the settlement agreement. Some members of Congress say it was written in a way that gives banks too much discretion.

Banks Once Again Accused of Shady Loan Deals

A media report says lenders are using loopholes in a 2012 settlement with the government to foreclose on homeowners unnecessarily.
A media report says lenders are using loopholes in a 2012 settlement with the government to foreclose on homeowners unnecessarily.


    0 of 8192 characters used
    Post Comment

    No comments yet.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)