The Federal Reserve plans to enforce remedial action at mortgage servicing companies previously found to be negligent, according to a senior associate director in the Fed’s division of consumer and community affairs.
“The Federal Reserve will continue to monitor, on an ongoing basis, the corrective measures that are being taken by the servicers and bank holding companies it supervises,” said Suzanne Killian, the senior associate director, who testified before a House Committee on Oversight and Government Reform in Brooklyn, New York.
Killian’s remarks summarized previously disclosed enforcement actions and monetary fines against some of the largest mortgage servicers in the U.S. for “misconduct and negligence related to deficient practices in residential mortgage loan servicing and foreclosure processing.”
The Fed said in February that it would fine five banking organizations a total of $766.5 million as part of a broader settlement over foreclosure actions. The five holding companies are Bank of America Corp. (BAC), Citigroup Inc. (C), Ally Financial Inc., JPMorgan Chase & Co. and Wells Fargo & Co. (WFC)
Killian said the Fed will “take appropriate supervisory action including a possible cease and desist order or monetary penalties to address any inadequacies or violations of the enforcement actions.”
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