Fed to Fine 8 More Banks in Review of Foreclosure Abuses

Eight additional banks will face fines by U.S. regulators as part of a massive review of errors or deficiencies in foreclosures processed during 2009 and 2010, a Federal Reserve official said today.
The banks — EverBank, Goldman Sachs, HSBC North America, OneWest Bank, MetLife, PNC Financial Services Group, US Bancorp and SunTrust Banks — face monetary sanctions for “unsafe and unsound practices in their loan servicing and foreclosure processing,” the official said.
The eight banks would join the five biggest lenders regulated by the Fed that were fined a total of $766.5 million last month for foreclosure and servicing abuses.
Those five — Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo — recently agreed to the $25 billion settlement with federal and state authorities over the mishandled or false “robo-signing” of foreclosure documents in nearly 2 million foreclosure cases.
But the 10 banks are being fined in a separate regulatory action known as the “independent foreclosure review.”
The Office of the Comptroller of the Currency late last year announced the start of the so-called “independent foreclosure review” required under the agency’s enforcement actions taken in April 2011.
A total of 14 mortgage servicers and their affiliates that make up the “independent foreclosure review” are required to engage independent firms for multi-faceted reviews of foreclosure actions during those two years.
The Fed and the Office of the Comptroller of the Currency have already sent letters to 4 million borrowers who could get compensated “as a result of errors, misrepresentations, or other deficiencies in foreclosure proceedings,” according to regulators.
Eligible borrowers have to return their “Request for Review” forms by the end of July. The form must be completed and postmarked no later than July 31, 2012.
Suzanne G. Killian, senior associate director, the Fed’s Division of Consumer and Community Affairs, announced the additional fines in testimony today before the House Committee on Oversight and Government Reform in New York.
“Although the Federal Reserve has not issued monetary sanctions at this time against the other eight institutions that it supervises … the Federal Reserve believes that monetary sanctions in those cases are appropriate and plans to announce monetary penalties against them,” Killian said.
She did not provide details.
The 14 mortgage servicers and their affiliates that make up the “independent foreclosure review” are also required to engage independent firms for multi-faceted reviews of foreclosure actions during those two years.
Borrowers can visit www.IndependentForeclosureReview.com for more information about the review and claim process.

Leave a Reply

Your email address will not be published. Required fields are marked *