Wells Fargo, JPMorgan Chase and four other banks are still not meeting standards in handling troubled mortgage borrowers, federal bank regulators say. (Julie Jacobson / Associated Press)
By E. Scott Reckard
June 17, 2015
Four years after pledging to clean up wide-ranging foreclosure abuses, Wells Fargo & Co., JPMorgan Chase & Co. and four other banks still aren’t complying with customer-service standards imposed by a federal regulator.
The Office of the Comptroller of the Currency said Wednesday that it has restricted mortgage servicing operations at Wells Fargo, Chase, U.S. Bancorp, Santander Bank, EverBank Financial Corp. and HSBC Holdings.
“We’re not satisfied with where they are at this point in time,” Morris Morgan, deputy comptroller for large banks, said during a conference call.
By contrast, the agency said it had lifted consent orders against Bank of America Corp., Citigroup Inc. and PNC Financial Services, finding that they have complied with the orders issued in April 2011 and amended in February 2013.
Morgan said regulators expect Wells Fargo, Chase and the other four noncomplying banks to take “months, not years,” to meet servicing standards.
For now, the banks must seek permission from the comptroller to name senior servicing managers, set up offshore call centers or acquire mortgage servicing business, which collects payments and handles foreclosures.
The harshest penalties were against San Francisco-based Wells Fargo, California’s largest bank and one of the top four nationwide, and international giant HSBC, based in London.
Wells Fargo and HSBC were banned from acquiring additional mortgage servicing rights or setting up servicing in other countries until they can show they are complying with the terms of consent orders.
The banks will be permitted to service their existing mortgage portfolios as well as their own newly originated home loans.
The restrictions are significant because big banks and nonbank servicers such as Ocwen Financial Corp., a specialist in handling troubled subprime borrowers, frequently trade these mortgage servicing rights.
For example, Bank of America, which became the largest mortgage servicer after buying high-risk lender Countrywide Financial Corp. in 2008, has since sold off rights to service most of the troubled mortgages it acquired in that ill-fated deal to Ocwen and other servicers.
To read entire story, click here.