The rules imposed on mortgage lenders as a result of the national foreclosure settlement have been revised following ongoing criticism of the way in which the servicers were handling borrowers.
The settlement initially created 304 standards to which the nation's five largest servicers, Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally/GMAC, would have to comply.
Illinois Attorney General Lisa Madigan, who was one of the state's attorneys general that was listed on the case and sits on the settlement's oversight committee, said the standards "were supposed to eliminate headaches for borrowers, but homeowners continue to report problems."
All five banks will now give borrowers 60 days, instead of 30, to provide additional documents to help them get a loan modification before their property goes into foreclosure or a foreclsoure-related sale. The lenders also say they will do a better job of supervising staffers that handle borrowers.
Wells Fargo and Bank of America agreed to additional provisions, including increased specificity regarding the missing documents of borrowers and escalating loan modification applications when a customer is being asked repeatedly for additional information. The two servicers will also name a direct contact for housing agencies working with homeowners and use an online portal for document submission.