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AG to Wells Fargo: Don't halt loan review

NY Attorney General Eric Schneiderman has issued notices

NY Attorney General Eric Schneiderman has issued notices to 4 LI gas stations that he says illegally raised gas prices after superstorm Sandy. Photo Credit: Charles Eckert

New York's top law enforcement officer has warned Wells Fargo that it must not halt its review of mortgage modification requests in the aftermath of superstorm Sandy.

In a letter to John Stumpf, the chief executive of Wells Fargo, Attorney General Eric Schneiderman wrote that the lender has suspended its review of loan modification requests.

A law firm for the lender has stated that Wells Fargo will not respond to requests for loan modifications until it receives information from the Federal Emergency Management Agency, Schneiderman wrote.

The $25-billion accord reached by Wells Fargo and four other lenders with federal and state agencies requires the lenders to make decisions about loan modification requests within 30 days of receiving a completed application, Schneiderman wrote. The accord settled charges that the banks foreclosed improperly. Prosecutors "will aggressively pursue any loan servicing company that uses this tragic event as an excuse" to not meet the deadline, Schneiderman wrote.

The statement that Wells Fargo has suspended its review of loan modification requests "represents a misunderstanding," Wells Fargo spokeswoman Vickee Adams said. However, she declined to say whether the bank would be able to meet the 30-day deadline described by Schneiderman. Customers need to contact the bank, "so we can understand their specific needs," she said.

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