The FRB issued monetary sanctions against a bank-holding company for its failure to adequately oversee its subsidiary bank’s mortgage loan servicing and foreclosure processing operations, which resulted in deficiencies affecting the safety and soundness of the bank. The bank-holding company was part of the April 2011 enforcement action involving 14 of the largest mortgage servicers. The assessment order, totaling $3.2 million, mirrors assessment orders issued by the FRB in February 2012 that imposed monetary sanctions against five other mortgage servicing organizations, which entered a settlement agreement with the state attorneys general and the DOJ. The February 2012 orders require the organizations to provide payments and designated types of monetary assistance and remediation to residential mortgage borrowers. The FRB contemplates the possibility of a similar settlement under which the bank agrees to provide borrower assistance or remediation.
Alert August 21, 2012