U.S. state attorneys general are pressing four banks to accept a legal settlement over botched foreclosures similar to a deal reached with larger competitors this year, according to three people briefed on the matter.
U.S. Bancorp (SFBC), PNC Financial Services Group (PNC) Inc., SunTrust Banks Inc. (STI) and HSBC Holdings Plc (HSBA) have held talks with state and federal officials who investigated claims that loan servicers mishandled foreclosure documents, according to the people, who spoke on condition of anonymity because the talks are private.
Sponsored Links Buy a link Neil Brazil, a spokesman for HSBC’s North America unit, said in an e-mail that the London-based lender has conducted “preliminary discussions with its bank regulators and other governmental agencies” and that “the timing of any settlement is not presently known.”
State attorneys general led by Tom Miller, a Democrat from Iowa, began an investigation of mortgage servicers in October 2010 after reports that practices including “robo-signing” had led to improper foreclosures. The probe led to a settlement in February among the five biggest servicers — JPMorgan Chase & Co. (JPM), Citigroup Inc. (C), Wells Fargo & Co. (WFC), Bank of America Corp. and Ally Financial Inc. — and 49 states and the federal government.
Michael McCoy, a spokesman for Atlanta-based SunTrust, declined to comment, as did Frederick Solomon, a spokesman for Pittsburgh-based PNC and Tom Joyce, a spokesman for Minneapolis- based U.S. Bancorp.
Repurchase Reserves
The effects of the housing market collapse continue to be felt by these and other banks, not only on mortgage servicing. SunTrust said today it would set aside $375 million to repurchase faulty loans it may have originated, following PNC, which set aside $350 million in June.
The deal with the five largest mortgage servicers is valued at $25 billion, including $5 billion in payments to states and $20 billion that banks will use to compensate borrowers who lost their homes to foreclosures, forgive debt, give payment forbearances, arrange short sales and refinance mortgages at lower rates. It also specified new standards for fair servicing of mortgages. In return, the banks received limited protection from state litigation.
“The jury is still out on whether this gets fixed or whether the attorneys general will have to go after them,” Ira Rheingold, executive director of the National Association of Consumer Advocates, said in an interview.
Settlement Resisted
The attorneys general made efforts to get the four smaller banks to join the February agreement — with proportionally smaller payments — before striking the deal with only the big five, one of the people briefed on the talks said.
In the last few months, the AGs have resumed the pressure on the smaller banks. In early August, they met in Washington with federal officials from the Department of Justice and the Department of Housing and Urban Development, and 12 state attorneys general including Miller.
Mortgage servicers typically handle billing and collections, as well as foreclosures when borrowers fail to pay. The four regional banks, whose mortgage portfolios are far smaller than those of the five larger banks, say the states have yet to demonstrate that a settlement would be more beneficial than letting banks handle customers’ problems individually, according to the people briefed on the talks.
Just back out of hospital in early March for home recovery. Therapist coming today.
Sales fell 5.9% from September and 28.4% from one year ago.
Housing starts decreased 4.2% to a seasonally adjusted annual rate of 1.43 million units in…
OneKey MLS reported a regional closed median sale price of $585,000, representing a 2.50% decrease…
The prices of building materials decreased 0.2% in October
Mortgage rates went from 7.37% yesterday to 6.67% as of this writing.
This website uses cookies.