Gov't orders 14 lenders to reimburse homeowners
WASHINGTON – The federal government on Wednesday ordered 16 of the nation's largest mortgage lenders and servicers to reimburse homeowners who were improperly foreclosed upon.
Government regulators also directed the financial firms to hire auditors to determine how many homeowners could have avoided foreclosure in 2009 and 2010.
Citibank, Bank of America, JPMorgan Chase and Wells Fargo, the nation's four largest banks, were among the financial firms cited in the joint report by the Federal Reserve, Office of Thrift Supervision and Office of the Comptroller of the Currency.
The Fed said it believed financial penalties were "appropriate" and that it planned to levy fines in the future. All three regulators said they would review the foreclosure audits. Under the agreements reached, the lenders and servicers have 45 days to hire an auditor and will "remediate all financial injury to borrowers caused by any errors, misrepresentations, or other deficiencies." There is no minimum or maximum dollar amount identified.
In the four years since the housing bust, about 5 million homes have been foreclosed upon. About 2.4 million primary mortgages were in foreclosure at the end of last year. Another 2 million were 90 days or more past due, putting them at serious risk of foreclosure.
Critics, including Democratic lawmakers in Congress, say the order is too lenient on the lenders. House Democrats introduced legislation Wednesday that would require lenders to perform a series of steps, including an appeals process, before starting foreclosures.
"I want to know what abuses (the government agencies) identified, which banks committed them and how their proposed consent agreement is going to fix these problems," said Rep. Elijah Cummings, D-Md., the ranking member of the House Government and Oversight Committee. "Based on what I have read ... I am not encouraged at all."
Sen. Tim Johnson, D-S.D., chairman of the Senate Banking Committee, said the agreements struck were a "step towards addressing the improper and fraudulent practices to which many of the country's largest mortgage servicers have admitted."
The other lenders and service providers cited by the agencies include: Ally Financial Inc., Aurora Bank, EverBank, HSBC, MetLife Bank, OneWest Bank, PNC, Sovereign Bank, SunTrust Banks, U.S. Bank, Lender Processing Services and MERSCORP.
Citigroup said in a statement that it had "self-identified" needed changes in 2009 and that it has helped more than 1.1 million homeowners avoid foreclosure.
"We are committed to working with our regulators to further strengthen our programs in these areas and meeting these new requirements," the company said.
Ally Financial, formerly known as GMAC, said it had not found "any instance where a homeowner was foreclosed upon without being in significant default."
Without specifically identifying instances of bad foreclosures, the government agencies noted in its report that the "deficiencies in foreclosure processing observed among these major servicers may have widespread consequences for the housing market and borrowers."
John Taylor, chief executive of the National Community Reinvestment Coalition, a consumer housing watchdog, said the government's action is a year too late. It does little to help those who are just now wrestling with a foreclosure and those who have already been displaced, he said. Rather than moving swiftly to seize people's homes, the banks should have done a better job helping people lower their mortgage payments through modification programs, he said.
"This should have happened a long time ago," he said. "There are so many people who, if they had received a meaningful modification, could have stayed in their homes."
Government regulators also directed the financial firms to hire auditors to determine how many homeowners could have avoided foreclosure in 2009 and 2010.
Citibank, Bank of America, JPMorgan Chase and Wells Fargo, the nation's four largest banks, were among the financial firms cited in the joint report by the Federal Reserve, Office of Thrift Supervision and Office of the Comptroller of the Currency.
The Fed said it believed financial penalties were "appropriate" and that it planned to levy fines in the future. All three regulators said they would review the foreclosure audits. Under the agreements reached, the lenders and servicers have 45 days to hire an auditor and will "remediate all financial injury to borrowers caused by any errors, misrepresentations, or other deficiencies." There is no minimum or maximum dollar amount identified.
In the four years since the housing bust, about 5 million homes have been foreclosed upon. About 2.4 million primary mortgages were in foreclosure at the end of last year. Another 2 million were 90 days or more past due, putting them at serious risk of foreclosure.
Critics, including Democratic lawmakers in Congress, say the order is too lenient on the lenders. House Democrats introduced legislation Wednesday that would require lenders to perform a series of steps, including an appeals process, before starting foreclosures.
"I want to know what abuses (the government agencies) identified, which banks committed them and how their proposed consent agreement is going to fix these problems," said Rep. Elijah Cummings, D-Md., the ranking member of the House Government and Oversight Committee. "Based on what I have read ... I am not encouraged at all."
Sen. Tim Johnson, D-S.D., chairman of the Senate Banking Committee, said the agreements struck were a "step towards addressing the improper and fraudulent practices to which many of the country's largest mortgage servicers have admitted."
The other lenders and service providers cited by the agencies include: Ally Financial Inc., Aurora Bank, EverBank, HSBC, MetLife Bank, OneWest Bank, PNC, Sovereign Bank, SunTrust Banks, U.S. Bank, Lender Processing Services and MERSCORP.
Citigroup said in a statement that it had "self-identified" needed changes in 2009 and that it has helped more than 1.1 million homeowners avoid foreclosure.
"We are committed to working with our regulators to further strengthen our programs in these areas and meeting these new requirements," the company said.
Ally Financial, formerly known as GMAC, said it had not found "any instance where a homeowner was foreclosed upon without being in significant default."
Without specifically identifying instances of bad foreclosures, the government agencies noted in its report that the "deficiencies in foreclosure processing observed among these major servicers may have widespread consequences for the housing market and borrowers."
John Taylor, chief executive of the National Community Reinvestment Coalition, a consumer housing watchdog, said the government's action is a year too late. It does little to help those who are just now wrestling with a foreclosure and those who have already been displaced, he said. Rather than moving swiftly to seize people's homes, the banks should have done a better job helping people lower their mortgage payments through modification programs, he said.
"This should have happened a long time ago," he said. "There are so many people who, if they had received a meaningful modification, could have stayed in their homes."
1,110 Comments
- 517 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 33 users disliked this commentRod Report Abuse
get the first one to jail and the rest will start to talk...
Replies (10) - 382 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 27 users disliked this commentBIG AL Report Abuse
it is jail time baby== we need to get these idiots to stop screwing the american people. all they do is pay a fine and walk away and do it all over again. we need to get their attention and just maybe we will start getting some one or some people to start being honest. or is that to much to ask. oh ,i forgot the rest of the idiots in congress are also two faced crooks also, screw the american people,
Replies (14) - 97 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 4 users disliked this commentPatriot Report Abuse
Citibank's response is a total sham. They're bad for the country.
Reply - 94 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 4 users disliked this commentBeen There Report Abuse
People forget how much power they really have. Banks want you to think you exist because of them when it's really the other way around. If you can, take your money (Business) out and go somewhere else. Just think what would happen if every customer of Citibank took their business (Loans, accounts, Credit Cards, etc..) elsewhere.
Replies (4) - 150 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 9 users disliked this commentflame Report Abuse
Regulators and banks are in bed together. They have a long standing marriage. They don't cheat on each other. They work their CON TOGETHER IN PERFECT UNISON,against the unsuspecting american citizens. Hard working americans pursuing the american dream is their favorite 'MARK".
Replies (5) - 160 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 11 users disliked this commentSpuds Report Abuse
V,
Replies (11)
I dont see the problem if these mega banks failed. So be it! I wouldnt put my money in any of them any how. Small home town banks and credit unions are where the service is anyhow. I call my bank and get to talk to a real live person. - 49 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 1 users disliked this commentNarrguy Report Abuse
The working people get screwed all the time.
Replies (7) - 58 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 2 users disliked this commentI break for coffee Report Abuse
"Some men rob you with a six-gun -- others with a fountain pen."
Replies (2)
-- Woodie Guthrie
Hope we will some justice for those who were robbed and repayment to those who had to bail the out the banks. - 82 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 5 users disliked this commentSLZimmer Report Abuse
Unfortunately, corporate greed and corruption is an accepted part of American culture, and only mock indignation and hand-slapping usually results from it become "to public", as long as you are one of the inside-players pulling the puppet strings of power.
Replies (1) - 146 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 13 users disliked this commentSilky Johnson Report Abuse
Banks are our worst enemy....they will stab you in the back while slashing your throat.
Replies (10)
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