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

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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

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.

[…]

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