Fed fines 5 banks over mortgage servicing

Banks to pay $35M in penalties in move that will end enforcement actions

New York /
Jan.January 12, 2018 02:02 PM

Janet Yellen, Goldman Sachs’ Lloyd Blankfein and Morgan Stanley’s James Gorman

The Federal Reserve settled five mortgage servicing cases by issuing $35 million in fines to banks that were cited for flawed services.

The move ends enforcement actions from the dating back to 2011 and 2012 involving five other banks have already paid similar fines, Reuters reported. The five banks issued fines on Friday are Goldman Sachs, Morgan Stanley, CIT Group, US Bancorp and PNC Financial.

Goldman Sachs will pay the largest fine at $14 million. The enforcement actions followed the 2007 and 2008 financial crisis to address “shortcomings” of banks whose homeowner borrowers struggled to keep current on mortgage payments.

The Fed also ended enforcement actions for two mortgage servicers, Lender Processing Services and MERSCORP Holdings.

In November, President Trump nominated Fed board member Jerome Powell to succeed Janet Yellen as chair of the national bank. His appointment to the position is still pending a floor vote by the Senate. [Reuters via NYP] — Will Parker


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