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April 17, 2014

Fed Targets More Banks for Foreclosure Errors

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Fed Targets More Banks for Foreclosure Errors

A $25 billion foreclosure settlement among the nation’s five largest banks and federal regulators isn’t the end to regulator’s efforts to repair the wrongs from lenders’ foreclosure abuses. Regulators are casting a wider net on the number of banks they’re eyeing to punish for wrongful foreclosure practices. 

The Federal Reserve recently recommended that eight more financial firms, which were not part of the government’s settlement, be fined for their foreclosure practices. The eight firms the Fed cited: HSBC’s United States bank division, SunTrust Bank, MetLife, U.S. Bancorp, PNC Financial Services, EverBank, OneWest and Goldman Sachs. 

The Fed said these firms should be fined for “unsafe and unsound practices in their loan servicing and foreclosure processing,” Suzanne G. Killian, a senior associate director of the Federal Reserve’s Division of Consumer and Community Affairs, said at a House Oversight Committee last month. 

The landmark $25 billion settlement announced earlier this year only encompassed the five largest banks: Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, and Ally Financial. The banks agreed to the settlement, but did not have to admit any wrongdoing.

Source: “As Foreclosure Problems Persist, Fed Seeks More Fines,” The New York Times (April 1, 2012)

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