Six big banks, including JPMorgan Chase and Wells Fargo, are facing new restrictions on their mortgage operations after a federal bank regulator determined they didn’t do enough to correct problems with their foreclosure practices following the housing financial crisis.
In a 2011 consent order with the Office of the Comptroller of the Currency, the banks had promised to improve how they handled foreclosures.
The OCC announced Wednesday that JPMorgan Chase, Wells Fargo, EverBank, HSBC, Santander, and U.S. Bank are now required to get approval from the agency for appointments of senior officers responsible for residential mortgage servicing, to set up off shore call centers, and to acquire mortgage servicing business that collect payments and handle foreclosures.
Orders against Bank of America, Citibank, and PNC Bank were terminated by the OCC, because it determined that these banks have complied with April 2011 orders as amended in February 2013.
Bank regulators took action after the housing financial crisis when consumers complained of mortgage practices such as “robo-signing” of foreclosure documents by officials who didn’t know the facts of the case, poor documentation, lost paperwork, poor customer service, and unjustified fees.
The OCC also announced it will hand over to the states $280 million it received in 2011 as part of a settlement related to the housing financial crisis.
So far, more than $2.7 billion has been distributed to more than 3.2 million borrowers from OCC-supervised institutions. The OCC said this is more than 90 percent of the total amount available for distribution.
However, the agency expects to have $280 million at the end of the year in uncashed checks. That amount will be turned over to the states so they can try to locate eligible homeowners.