Although federal and state officials announced a $25 billion settlement last month with the nation’s five largest mortgage servicing firms, including Bank of America Corp., Wells Fargo & Co., J.P. Morgan Chase & Co., Citigroup Inc. and Ally Financial Inc., the Federal Reserve has named eight more banks to that list of mortgage servicers that it intends to fine for foreclosure abuse primarily through the use of “robo-signers.” The eight additional banks the Fed has deemed to have engaged in abusive foreclosure practices include HSBC Holdings PLC’s U.S. bank division, SunTrust Banks Inc., MetLife Inc., U.S. Bancorp, PNC Financial Services Group Inc., EverBank, OneWest Bank and Goldman Sachs Group Inc. The initial five banks that engaged in foreclosure fraud and abuse were fined over $760 million; no fines for the latest eight have been announced.
The Fed, in spring 2011, ordered several of the largest banks engaged in mortgage lending to review their foreclosure practices. Now, the bank regulators are moving forward to help distressed homeowners by hiring independent consultants to review the bank’s foreclosure files. This arrangement is different than the $25 billion settlement; consumers have to request a review of their case under the banks’ review process. Thus, if consumers are deemed to have received a “financial injury” through abusive foreclosure practices, they may be in line for compensation.
(photograph of the Federal Reserve Bank courtesy of Dan Smith and available through WikiMedia Commons)