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Fed fines another 5 banks $35.1 million for mortgage servicing and foreclosure infractions

On Friday, the Federal Reserve Board announced another $35.1 million in civil penalties against five banks as part of its effort to terminate enforcement actions, issued in 2011 and 2012, against a total of 10 banks related to residential mortgage loan servicing and foreclosure processing.

The Fed announced Goldman Sachs was fined $14 million. Morgan Stanley received an $8 million penalty. CIT Group (which merged with OneWest) was fined $5.2 million. U.S. Bancorp received a $4.4 million fine and PNC was fined $3.5 million.

These financial institutions had yet to be penalized for mortgage servicing deficiencies, the Federal Reserve Board said in a statement. These additional penalties now bring the total amount of penalties issued in relation to mortgage servicing to $1.1 billion.

The other five banks that already paid penalties are Ally, Bank of America, HSBC, JPMorgan Chase and SunTrust Banks.

From the statement:

“When it issued the mortgage servicing enforcement actions, the Board announced that it believed monetary penalties were appropriate for all firms subject to the actions for their mortgage servicing deficiencies The Board previously assessed penalties against the other firms under mortgage servicing enforcement actions. With the penalties announced today, the Board has now assessed penalties totaling approximately $1.1 billion against all Federal Reserve supervised firms under mortgage servicing enforcement actions.

The Fed’s actions required all of the firms to improve oversight of residential mortgage loan servicing and required the firms with mortgage servicing subsidiaries supervised by the Federal Reserve to correct deficiencies in residential mortgage loan servicing and foreclosure processing, the top bank said in its statement.

A spokesman for Goldman Sachs told HousingWire “We’re pleased to have resolved this matter.”  

Chase Home Lending said in a statement, “Today’s announcement affirms the work we have done to serve our customers better. We improved our technology and our procedures, and will continue to deliver high-quality service to homeowners across the country.”

Additionally, the Board announced the termination of a supplemental agreement with Ally, issued in 2012 after Ally’s mortgage servicing subsidiaries sought out bankruptcy protection, which addressed the parent company’s contingent obligations under the 2011 enforcement action against Ally. According to the Fed, this agreement is no longer necessary after the termination of the 2011 action.

The Fed also announced the termination of enforcement actions issued against two servicers, Lender Processing Services, succeeded by ServiceLink, and against MERSCORP. Both companies faced enforcement actions tied to foreclosure-related services.

Article source: https://www.housingwire.com/articles/42277-fed-fines-another-5-banks-351-million-for-mortgage-servicing-and-foreclosure-infractions

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