Maryland financial regulators will take part in the effort to make sure the big banks that recently settled allegations of widespread foreclosure misconduct live up to the agreement they signed.
Anne Balcer Norton, deputy commissioner of financial regulation at the state Department of Labor, Licensing and Regulation, said the agency has been named to the monitoring committee for the nationwide settlement. It's the only state bank regulator on the committee, she said.
"I'm pleased that we get a seat at the table," she said, adding that the agency has the "ground-level perspective" of what homeowners are going through.
The state's financial regulation division was also on the executive committee for the settlement talks.
The settlement documents, filed in U.S. District Court in Washington this week, haven't yet been approved by a judge but are expected to get the OK. Maryland's share of the $25 billion settlement is nearly $1 billion.
The settlement was prompted by an attorneys general inquiry into "robo-signing" -- assembly-line production of foreclosure documents without checking for accuracy, including court affidavits with forged signatures and bogus notarizations. But the settlement documents touch on problems beyond that.
According to the Los Angeles Times, the settlement documents "included a complaint alleging that the banks 'engaged in a pattern of unfair and deceptive practices' in servicing mortgages, including failing to apply mortgage payments correctly, charging excessive fees and lying to borrowers."
Loans serviced by Bank of America "generated an outsized share of complaints about lost paperwork, unresponsiveness to homeowners and such tactics as telling borrowers they were good candidates for loan modifications while pressing at the same time for foreclosures," the newspaper reported.
Norton said the hope is that the mortgage-servicing standards set out in the settlement agreement will ultimately apply to all firms, not just to the servicing arms of the banks that signed.
Regulators want to work with the Consumer Financial Protection Bureau to make that happen "so it truly changes the way loans are serviced," she said.