16th January 2018

Fed Board terminates residential mortgage loan servicing actions against 10 banks, and fines five of them

The Federal Reserve Board has announced the termination of enforcement actions related to residential mortgage loan servicing and foreclosure processing issued in 2011 and 2012 against 10 banking organisations. The Board also announced civil money penalties totalling $35.1m against five of these organizations that had not yet been fined for their mortgage servicing deficiencies related to those enforcement actions.

When it issued the mortgage servicing enforcement actions, the Board announced that it believed monetary penalties were appropriate for all firms subject to the actions for their mortgage servicing deficiencies. The Board previously assessed penalties against the other firms under mortgage servicing enforcement actions. With the penalties announced, the Board has now assessed penalties totalling approximately $1.1bn against all Federal Reserve supervised firms under mortgage servicing enforcement actions.

The organisations and civil money penalties are:
• Ally Financial
• Bank of America
• CIT Group, Inc. (as successor to IMB HoldCo LLC) – $5.2m
• The Goldman Sachs Group – $14m
• HSBC North America Holdings
• JPMorgan Chase & Co
• Morgan Stanley – $8m
• The PNC Financial Services Group – $3.5m
• SunTrust Banks
• US Bancorp – $4.4m

The Board has also announced the termination by the Board and other federal financial regulatory agencies of joint enforcement actions issued in 2011 against Lender Processing Services, Inc. (LPS), which was succeeded by ServiceLink Holdings, LLC, and against MERSCORP Holdings, Inc., formerly known as MERSCORP, Inc. (MERS). These enforcement actions addressed deficiencies in the foreclosure-related services LPS and MERS each provided to entities regulated by the agencies.

The Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation are parties to the action against LPS. Each of these agencies, as well as the Federal Housing Finance Agency, are parties to the action against MERS. The termination of the actions was based on evidence of sustainable improvements in the foreclosure-related practices of LPS and MERS.