The federal regulators of the United States are getting ready to assault eight financial agencies of the country. These agencies were not included in the recent foreclosure settlement over various foreclosure issues involving improper foreclosure practices or fraudulent mortgage documentation.
Recently, these agencies have raised questions about this settlement and also regarding the foreclosure problems in the banking sector. A senior official of the Federal Reserve recommended a penalty for these agencies. Moreover, some advocates, lawyers and judges favoring homeowners also stated that many homeowners have complained against these firms that they have lost their homes in foreclosure after the involvement of these agencies.
These eight financial agencies are PNC Financial Services in Pittsburgh, SunTrust Bank, US branch of HSBC, OneWest, MetLife, Goldman Sachs, US Bancorp and EverBank.
According to the senior associate director for the Federal Reserve’s Division of Consumer and Community Affairs, Suzanne Killian, these agencies should be penalized for “unsafe and unsound practices in their loan servicing and foreclosure processing.” She stated this last month during a hearing for a House Oversight Committee in New York.
This recommendation is an outcome of the two years long investigation in foreclosure processing. These banks have been carrying out their foreclosure process with inaccurate data without reviewing any of the documents, and as a result many properties moved into foreclosure due to this.
According to some, this settlement of the Federal Reserve was an effort to force these financial agencies to agree with the settlement which involves all the state federal officials and Attorney Generals. The attorneys and federal officials tried to reach all these organizations so all the agencies could abide by the same settlement decision.
In this 49-state foreclosure settlement program, the main focus was on the 5 major banks of the country which includes Bank of America, Wells Fargo, JPmorgan Chase, Ally Financial and Citigroup. These 5 banks did not admit to allegations of improper and inaccurate foreclosure processing but agreed to pay $25 billion as compensation during the settlement program.
Although this settlement has solved most of the problems seen in foreclosure cases handled by these 5 giant mortgage servicing firms, the settlement could not amend problems in other foreclosure cases that are being handled by other firms.
After proper scrutiny, The New York Times has found that there are many foreclosure cases piled up in courts all across the nation which are handled by these eight financial institutions, many of which have been filed on the basis of fraudulent mortgage papers.
Photo by Renjith Krishnan.
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