The Office of the Comptroller of the Currency (OCC) put Wells Fargo & Co. on the line for $70 million after the bank allegedly failed to comply with the consent orders linked to the 2011 independent foreclosure review. In paying the fine, the OCC will lift mortgage servicing restrictions on the bank as it is now in compliance with the requirements of the foreclosure review.
In April 2011, the OCC issued separate consent orders for 12 banks that were found to be in violation of mortgage servicing rules that were established following the 2008 financial crisis. The consent orders then were modified in 2013 and 2015.
The consent orders prohibited the bank from acquiring mortgage servicing rights, making new contracts to perform mortgage servicing and engaging in new offshoring mortgage servicing activity until the consent order was terminated.
According to the OCC, Wells Fargo dragged its heels in correcting deficiencies and filed payment change notices in bankruptcy courts which did not comply with bankruptcy rules. Further, the OCC said that Wells Fargo made escrow calculation errors between March 2013 and October 2014 that in some cases led to incorrect loan modification denials and “constituted unsafe or unsound banking practices.”
In June 2015, the OCC lifted its consent orders against Bank of America, Citibank and PNC Bank. However, it took additional actions against Wells Fargo, JPMorgan Chase and four other banks for failing to make required fixes in their mortgage servicing businesses. In January, JPMorgan Chase Bank and EverBank paid fines of $48 million and $1 million, respectively, to settle violations of consent orders issued by the OCC. Wells’ penalty will be paid to the U.S. Treasury.
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