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January 12, 2018

Federal Reserve Assesses a Combined $35.1 Million in Civil Money Penalties Against 5 Mortgage Servicers Over Mortgage Servicing Practices

On January 12, 2018, the Federal Reserve Board (FRB) announced the assessment of civil money penalties and consent orders against five national banking organizations over mortgage servicing deficiencies, resulting in a total monetary settlem​ent of $35.1 million.

In 2011 and 2012, the FRB initiated enforcement actions against ten firms, including the five against whom penalties were recently assessed, alleging to have uncovered irregularities in their home loan servicing and foreclosure processing operations.  The FRB had previously assessed penalties against five of the ten firms, but announced on January 12, that it was formally terminating all ten actions and issuing penalties against the remaining five.  According to the FRB, the firms were engaged in unsafe and unsound servicing practices in violation of law, stemming from, among other things, weaknesses in the servicers’ foreclosure governance policies and procedures, quality control and internal auditing, and/or oversight and monitoring of third-party vendors.

In addition to penalties, the actions against the ten firms require improvements to mortgage servicing oversight and required firms with mortgage servicing subsidiaries to correct deficiencies in servicing and foreclosure processing.  The FRB also simultaneously announced that it was terminating actions against two mortgage servicers for their foreclosure-related services.

The post Federal Reserve Assesses a Combined $35.1 Million in Civil Money Penalties Against 5 Mortgage Servicers Over Mortgage Servicing Practices appeared first on Consumer Finance Insights (CFI).