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State and federal authorities held a press conference to announce a $25 billion settlement with the five largest mortgage servicers, and provided key details on how the money was being distributed and the amounts each institution is expected to pay.
February 9
WASHINGTON – Following on the announcement of a $25 billion settlement between state and federal agencies with the top five mortgage servicers, the Federal Reserve Board announced it was levying a $776.5 million fine against the firms’ parent companies for failing to properly oversee their subsidiaries.
Bank of America Corp. will pay $175.5 million in penalties, while JPMorgan Chase & Co. will pay $106.5 million on top of its servicer penalty. Wells Fargo and Citigroup will also pay $87 million and $22 million, respectively. Ally Financial will pay $17 million in addition to its penalty under the mortgage settlement.
Last year, the central bank issued enforcement actions against another six institutions for similar practices. The Fed did not issue any penalties against those firms at this time, along with the two thrift holding companies it now supervises, but said it plans to announce monetary penalties against them at a later date.
“The Federal Reserve will continue to closely monitor the conduct of the foreclosure review and the institutions’ implementation of the plans, and will take additional enforcement actions as needed,” the central bank said.
Separately, the Fed said it plans to publish the action plans now being required by banks with servicing entities to correct deficiencies in residential mortgage servicing and foreclosure processing.
