WASHINGTON BUREAU — MetLife Inc. has agreed to strengthen oversight of its residential mortgage banking activities, the company says.
MetLife, New York (NYSE:MET), is one of 14 banking organizations that have entered into consent order arrangements with federal banking regulators.
Federal bank regulators negotiated the consent orders after finding what they say were problems with mortgage foreclosure policies and practices, such as inaccurate documentation filings and inadequate oversight of lawyers and others involved in the foreclosure process.
The consent orders require the mortgage servicers entering into the orders to correct deficiencies found during examinations, and to take steps such as creating a single point of contact for homeowners facing the possibility of foreclosure
The consent order that MetLife entered into requires the company’s bank and holding company management to enhance oversight of the MetLife Bank risk-management, audit and compliance programs that relate to the bank’s residential mortgage loan servicing, loss mitigation and foreclosure activities.
MetLife has “never issued and does not own nontraditional mortgage products such as pay-option ARMs and sub-prime loans, which have the highest rate of default,” the company says in a statement.
MetLife’s mortgage operations service only about 1% of the U.S. home mortgage market, and the company’s bank “has not experienced the high volume of foreclosures that many larger servicers have experienced,” company spokesman John Calagna says.
Regulators imposed no monetary penalties on MetLife’s bank or the parent company, Calagna says.
Consumer groups and some members of Congress have criticized the consent orders.
Sen Jack Reed, D., R.I., called the consent orders “vague and toothless” and “a slap on the wrist.”
John Walsh, acting comptroller of the Currency, defended the consent orders, saying examiners found that servicers generally had the documents they needed to proceed with foreclosures.
But mortgage servicers should have held off on a small number of foreclosures because the borrowers had filed for bankruptcy court protection, had been approved for a trial period modification, or were protected by the Servicemembers Civil Relief Act, Walsh said.