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US regulator limits mortgage servicing activities at 6 banks
[WASHINGTON] A US bank regulator on Wednesday said it imposed restrictions on mortgage servicing against HSBC, Wells Fargo and four others because they failed to meet all of the requirements of a major settlement.
The Office of the Comptroller of the Currency (OCC) said the new limitations would apply to acquisitions of residential mortgage servicing rights, outsourcing servicing to others, and other related business activities.
Mortgage servicers accept payments from borrowers, negotiate loan modifications and pursue foreclosures. They include lenders and outside companies that buy the rights to handle loans.
Following the 2007-2009 financial crisis, banks reached a settlement with regulators over their mishandling of servicing activities, including "robo-signing", or using defective or fraudulent documents, to pursue home foreclosures.
Wells Fargo and HSBC face the toughest restrictions, the OCC said on Wednesday, and JPMorgan Chase, EverBank, Santander and US Bank also will have certain activities limited. The rules do not prevent banks from making any new loans, the OCC said.
JPMorgan said in a statement that it expected to meet all the requirements by the end of the summer.
The regulator said it also planned to take additional actions against the six banks.
The OCC said Bank of America, Citigroup and PNC all had met the requirements under the agreement.
So far, the settlement has resulted in payments of more than US$2.7 billion to borrowers, the OCC said. The regulator said it expected about US$280 million to be unclaimed at the end of 2015, and borrowers could access that money through state processes.