(Read More: Rising Rates Scare Borrowers Into Action)

In addition to the 29 servicer test results, Smith also reported receiving 59,586 consumer complaints as well as 797 from mortgage professionals between October and the end of March 2013.

The top consumer complaint was that a single point of contact was not provided or that contact was either difficult to deal with or to reach. The lack of a single servicing agent to work with each customer has led to dual-tracking; that is when one side of the bank is unaware that the other side is working on a loan modification and a foreclosure is completed while the borrower is still working through a mortgage modification.

Dual tracking violations of single point of contact and of timeline standards for loan modifications are also the crux of a lawsuit announced in early May by New York State Attorney General Eric T. Schneiderman against Bank of America and Wells Fargo. Schneiderman jumped the gun on Smith’s report, citing 339 violations of the National Mortgage Settlement in New York.

“Wells Fargo and Bank of America have flagrantly violated those obligations, putting hundreds of homeowners across New York at greater risk of foreclosure,” Schneiderman said in a statement released May 6.

(Read More: More Evidence Banks Violated Mortgage Pact: NY AG)

Former Bank of America employees, in affidavits filed in a Massachusetts lawsuit last week, claimed the lender paid them bonuses to deny loan modifications, lie to customers and initiate new foreclosures. Bank of America denied the allegations.

Smith had no comment on either lawsuit, saying only, “The single biggest deficit we have in the mortgage business is a deficit of trust.”

Article source: http://www.cnbc.com/id/100825528

(Read More: Map: Tracking the US Real Estate Recovery)

The settlement’s monitor, former North Carolina Banking Commissioner Joseph A. Smith noted, “a significant increase,” in consumer complaints in the second half of 2012.

In a February 2013 report he reported 5,700 consumer complaints submitted to his office, about half of which related to problems with loan modifications or customer service.

The banks have extended close to $46 billion in gross relief to more than 550,000 borrowers under the settlement so far, according to the Office of Mortgage Settlement Oversight. Thousands of borrowers have had their mortgage principal slashed under the settlement, which should reduce future delinquencies. Negative equity is a primary driver of new delinquencies, a fact all too clear in a new report Monday from Lender Processing Services.

“Looking at the March data, we see that borrowers with equity are actually outperforming the national average—at 0.6 percent, this group is quite close to pre-crisis norms,” said Herb Blecher of LPS Applied Analytics, which released the delinquency report Monday.

(Read More: Housing Recovery Shows Up In Job Gains)

“The further underwater a borrower gets, the higher those problem rates rise. Borrowers with loan-to-value (LTV) ratios of just 100-110 percent are actually defaulting at more than twice the national average. For those 50 percent or more underwater, we see new problem rates of 4 percent.”

Article source: http://www.cnbc.com/id/100710946