Feds Unveil Consent Orders
Against Nation's Megaservicers —
Plus Vendors LPS and MERS
Wednesday, April 13, 2011
Among the nation's top ranked servicers, no one was spared. Formal charges were filed against Bank of America ($2.1 trillion in receivables/market share of 21.57%); Wells Fargo & Co. ($1.8 trillion in MSRs); JPMorgan Chase ($1.2 billion); CitiMortgage ($601 billion); and Ally Financial/Residential Capital Corp. ($384 billion).
In total, the Federal Reserve announced enforcement actions requiring 10 banking organizations to address their conduct, saying their "deficiencies represent significant and pervasive compliance failures and unsafe and unsound practices at these institutions."
The Fed said it is taking action to ensure that firms under its jurisdiction "promptly initiate steps to establish mortgage loan servicing and foreclosure processes that treat customers fairly, are fully compliant with all applicable law, and are safe and sound."
Others that were slapped with consent orders include: HSBC North America Holdings, Inc.; MetLife, Inc.; The PNC Financial Services Group, Inc.; SunTrust Banks, Inc.; and U.S. Bancorp.
The Comptroller of the Currency and Office of Thrift Supervision filed consent orders at the same time. OTS filed enforcement actions against four servicers for "weaknesses" in their foreclosure processes: Aurora Bank, EverBank, OneWest Bank and Sovereign Bank.
"The orders require swift and comprehensive action to remedy the widespread and significant deficiencies," OTS said. "The enforcement orders require each of the servicers to hire an independent firm to conduct another comprehensive review, overseen by the OTS, of foreclosure actions pending at any time in 2009 and 2010," the thrift regulator said.
The Fed also filed charges against servicing vendors Lender Processing Services, a provider of default-management services, and against MERSCORP, Inc. which provides services related to tracking and registering residential mortgage ownership and servicing rights.
The Fed said, "These actions address significant compliance failures and unsafe and unsound practices at LPS and its subsidiaries, and at MERS and its subsidiary. The action requires LPS to address deficient practices related primarily to the document execution services that LPS, through its subsidiaries DocX, LLC, and LPS Default Solutions, Inc., provided to servicers in connection with foreclosures. MERS is required to address significant weaknesses in, among other things, oversight, management supervision, and corporate governance."
The LPS action is being taken jointly with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision, while the MERS action is being taken jointly with those agencies and the Federal Housing Finance Agency.
At press time, only one firm had issued a statement about the charges, Citigroup. The bank said, "Our first priority is to keep families in their homes…Unfortunately, that is not always possible, and some cases proceed to foreclosure. In 2009, we self-identified needed changes in our foreclosure processes and proactively undertook corrective actions to enhance our policies and controls and the effectiveness of our processes."
Daily Briefing | Wednesday, April 13, 2011
JPM's Mortgage Revenue Hammered in 1Q, CO About to be Sent
JPMorgan Chase saw its mortgage-related revenue get hammered in the first quarter, falling a stunning 75% to $696 million (compared to 4Q), as originations declined and the firm focused resources on its massive servicing portfolio and dealing with legal issues tied to that business.JPM Mortgage Originations, Credit Losses Drop in 1Q
Mortgage originations at JPMorgan Chase dropped 29% since the end of 2010, kicking off a year where industrywide originations are projected to drop below $1 trillion.CoreLogic's New Outlook for Home Values Isn't Exactly Pretty
Sales of distressed properties could pull home prices down by another 10%, according to CoreLogic chief economist Mark Fleming.FRM Rate Rises and Apps Decline
Mortgage application volume decreased by 6.7% on a seasonally adjusted basis for the week ended April 8 as the average rate for the 30-year fixed-rate mortgage rose for the fourth consecutive week, according to the Mortgage Bankers Association.Bank Branches Producing Fewer Mortgages
A growing share of loans originated by banks are coming through their wholesale/correspondent channel, according to the American Bankers Association's annual real estate lending survey.Sandler O'Neill Adds MBS/Fixed-Income Managing Directors
Sandler O'Neill is adding two managing directors as well as three new sales professionals to its Chicago-based fixed-income group as part of an effort to strengthen its growing new-issue distribution of MBS and other fixed-income products.South Florida Foreclosures Decline but Not By Much
For the first time in four years, the number of foreclosures has fallen in the tri-county South Florida region, according to the latest report by CondoVultures.Iowa AG Blasts Bank-Funded Servicer Settlement Study
Iowa Attorney General Tom Miller blasted a study Tuesday that said proposed servicer settlement terms could cost the economy $10 billion a year.Georgia Leaves Fraud's Top Ten List
For the first time in 13 years, Georgia won't be among the top ten states for mortgage fraud when LexisNexis releases its annual MARI fraud index on May 2.Canada’s Davis + Henderson Floats New Shares To Fund Mortgagebot Deal
Davis + Henderson, Toronto, said it raised $122 million in a secondary share offering, which the financial services firm used to finance its acquisition of online mortgage origination provider Mortgagebot.REO Allegiance Gets Field Services Contract
REO Allegiance has been selected by 24 Asset Management Corp. to conduct property preservation and field services.
No comments:
Post a Comment