PD Editorial: Banks get poor marks on mortgage deal

It's report card season, and some big banks aren't getting high marks for keeping their promises.

As part of a $25 billion national settlement of mortgage lending complaints, five of the largest U.S. banks agreed to identify a single employee to help each borrower seeking a loan modification.

Sixteen months later, thousands of borrowers are still getting bounced around and provided with conflicting information.

Neither have all the banks halted the practice of "dual tracking" — pursuing foreclosure even after accepting a troubled borrower's application for a modification.

Those findings were reported last week by an independent monitor of the settlement negotiated by 49 state attorneys general and federal regulators.

With the real estate market heating up, home sales and rising property values are returning to the headlines, and foreclosures are fading from the public's radar. But many thousands of homeowners are still trying to modify their loans, and many more former homeowners are discovering the limits of the settlement, which is delivering as little as $300 in compensation for improper foreclosures.

Yet again, it appears that there's little if any accountability for the banks.

In Britain, Bloomberg View noted recently, a parliamentary commission recommended that, to promote accountability, banks should identify individual executives as responsible for compliance with specific rules and regulations, making those individuals subject to prosecution for any violations. That sounds like a good idea.

On this side of the pond, Mary Jo White, the new chairwoman of the Securities and Exchange Commission, says she won't be as generous as her predecessors about approving settlements that don't include an admission of wrongdoing. We hope she sticks to her word.

For now, forcing the big banks to stick to their word in the mortgage servicing case is one small line of defense against a return to the misleading lending practices that contributed to a worldwide economic crisis just five years ago.

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