More On Legal & Compliancefrom The Advisor's Professional Library
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The 14 largest U.S. mortgage servicers must pay back homeowners for losses from foreclosures or loans that were mishandled in the wake of the housing collapse, the first of a set of sanctions regulators are seeking against the companies.
Bloomberg reports the settlement announced Wednesday between servicers and banking regulators could help the U.S. Justice Department determine the size and scope of fines for the flawed practices, regulators said.
Officials from the Justice department, the Department of Housing and Urban Development and 10 state attorneys general met with banks today, the second such meeting to negotiate a global settlement, Associate U.S. Attorney General Tom Perrelli said. The group is discussing potential fines and whether servicers should be required to reduce the principal on some home loans, according to the news service.
“This has been a very broad interagency effort,” Perrelli told reporters. “The best possible resolution for consumers, for all government entities, is a fully coordinated resolution.”
Today’s consent decrees with banks address a “subset” of issues with mortgage servicers, Perrelli said.
Iowa Attorney General Thomas J. Miller, who is leading the talks on behalf of the states, said today’s agreements won’t limit his pursuit of penalties. In March, the attorneys general called for changes to foreclosure practices and mandatory loan modifications, including mortgage principal write downs.
In addition to JPMorgan and Wells Fargo, Bloomberg lists Bank of America Corp. (BAC), Citigroup Inc. (C), the GMAC unit of Ally Financial Inc., Aurora Bank FSB, EverBank Financial Corp., HSBC Holdings Plc, OneWest, MetLife Inc. (MET), PNC Financial Services Group Inc. (PNC), Sovereign Bank, SunTrust Banks Inc. (STI), and US Bancorp also signed consent agreements with regulators.