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New US limits on six banks over mortgage problems

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The group, which includes JPMorgan Chase, Wells Fargo, HSBC and Santander, faces new barriers in buying mortgage servicing rights from other companies and appointing senior mortgage service officials, among other restrictions, said the Office of the Comptroller of the Currency (OCC).

[NEW YORK] US banking regulators imposed fresh limits on Wednesday on six banks' mortgage servicing activities for their failure to fully implement a 2011 settlement designed to address home-foreclosure abuses.

The group, which includes JPMorgan Chase, Wells Fargo, HSBC and Santander, faces new barriers in buying mortgage servicing rights from other companies and appointing senior mortgage service officials, among other restrictions, said the Office of the Comptroller of the Currency (OCC).

The other two banks are EverBank and US Bank National Association.

The OCC also said it expects to take additional enforcement actions against the banks, including possible fines.

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The banks were mandated under the 2011 settlements to upgrade their mortgage servicing operations after a probe of the industry uncovered widespread problems that could have led to improper foreclosures or foreclosure proceedings.

The 2011 settlements required banks to improve their communications with borrowers and to ensure that foreclosures are not pursued once a loan has been approved for modification.

However, the OCC took action Wednesday after concluding the banks continued "to engage in unsafe and unsound practices," said a consent orders released by the agency.

The OCC released three other banks from oversight after determining they complied with the 2011 agreements. They are Bank of America, Citigroup and PNC Bank.

Under the settlements, more than 3.2 million eligible borrowers have received more than US$2.7 billion, the OCC said.

AFP

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