USA v. Bank of America et al. | PLAINTIFF NEW YORK ATTORNEY GENERAL’S MEMORANDUM OF LAW IN SUPPORT OF MOTION TO ENFORCE THE CONSENT JUDGMENT AGAINST WELLS FARGO DEFENDANTS

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Case No. 1:12-cv-00361-RMC --------------------------------------------------------------- UNITED STATES OF AMERICA, et al., Plaintiffs, v. BANK OF AMERICA CORP., et al., Defendants. ---------------------------------------------------------------X

PLAINTIFF NEW YORK ATTORNEY GENERAL’S MEMORANDUM OF LAW IN SUPPORT OF MOTION TO ENFORCE THE CONSENT JUDGMENT AGAINST WELLS FARGO DEFENDANTS

ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Plaintiff 120 Broadway New York, NY 10271 Of Counsel: JANE M. AZIA Bureau Chief Consumer Frauds and Protection Bureau LAURA J. LEVINE Deputy Bureau Chief ADAM H. COHEN BRIAN N. LASKY MELISSA J. O’NEILL Assistant Attorneys General Plaintiff Eric T. Schneiderman, Attorney General of the State of New York (“NYAG”), respectfully submits this Memorandum of Law in support of the Motion to Enforce the Consent Judgment against defendants Wells Fargo & Company and Wells Fargo Bank, N.A. (collectively, “Wells Fargo” or the “Bank”). PRELIMINARY STATEMENT NYAG asks this Court to compel Wells Fargo to honor the terms of the bargain it struck just over a year ago, when it entered into the consent judgment commonly known as the “National Mortgage Settlement” (“NMS”). The National Mortgage Settlement was meant to put an end to a broad pattern of residential mortgage servicing abuses engaged in by Wells Fargo and other major mortgage servicing banks. These abuses included the rote and automatic signing of legal documents in hundreds of thousands of foreclosure proceedings across the country, known as “robo-signing,” and a pattern of obstructive practices designed to avoid reasonable modifications to loan terms by burying homeowners in paperwork and besieging them with bureaucratic delays and dead ends. Under the NMS, state and federal regulators released claims against the banks for their broad and extensive abuses in exchange for, among other things, the banks’ agreement to comply with highly specific servicing standards designed to make loan modifications available to distressed homeowners through a swift and streamlined process. The declarations submitted with this application, describing the experiences of 97 New York homeowners, show that Wells Fargo has not abided by its agreement. The Bank has engaged in widespread breaches of its most basic obligations under the consent judgment that have harmed and continue to harm thousands of New York families. Indeed, within the last few months, the Monitor of the consent judgment announced that Wells Fargo had repeatedly failed to comply with a key timing provision of the 2012 settlement. The Bank has continued to subject homeowners to Kafkaesque delays and obstructions in the loan modification process. The documents submitted herein show that the Bank made repeated demands that one homeowner provide additional information in support of his application for a loan modification over the course of a seven-month period. Most of the information required from the homeowner by the Bank had either been provided with the initial submission (such as the homeowner’s tax return for 2011) or related to trivial matters that could have no impact on the decision whether or not to grant a loan modification (such as the demand for a “letter of explanation” concerning a $2 amount listed on one paystub). Many New York homeowners were similarly required by the Bank to retrieve and resubmit documents that they had already provided with their original applications months earlier. Often, the Bank’s demands for documents were cryptic and confusing, if not entirely unintelligible to the average homeowner. The Bank has also subjected homeowners to repetitive and wasteful court appearances and provided them contradictory and inaccurate information. These abuses and delays have led to more than frustration for homeowners; they have caused the fees and interest owed by homeowners to grow, making it harder by the day for the homeowners to obtain modifications that would allow them to become current on their loans and avoid foreclosures. In order to put an end to the Bank’s continued defiance of the consent judgment, NYAG respectfully requests that the Court order that: (1) the Bank comply with the NMS requirements; (2) the Bank take such additional steps as are necessary to ensure compliance with the loan modification timelines; (3) the Bank provide relief from foreclosure for New York borrowers harmed by the Bank’s breaches of the NMS; (4) the Bank provide relief from assessments due to the Bank’s violations of the rights of New York borrowers; and (5) the Bank provide such other equitable relief as the Court may deem just and proper. [...]