Lenders reach agreement with NY banking regulator

The Department of Financial Services recently reported that Morgan Stanley and two other mortgage lenders reached an agreement with New York's banking regulator on claims of fraudulent and shoddy lending practices.

The agreement is part of a massive overhaul of the mortgage lending industry that state and federal officials are implementing to reform foreclosure practices and prevent another mortgage crisis. Some of the changes include an end to the practice of putting a property in foreclosure as the homeowner is seeking a loan modification, as well as the elimination of robo-signing, Bloomberg reported.

New York State Financial Services Superintendent Benjamin Lawsky said the same changes have been agreed upon by Goldman Sachs, Ocwen Financial and Litton Loan Servicing.

According to the Wall Street Journal, other changes include providing borrowers with a single customers service representative to prevent delays and stopping unnecessary and improper fees. In addition, any homeowner who was foreclosed upon illegally will have his or her equity restored, property returned or compensation if the home has sold. 

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