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MetLife Has Foreclosure Irregularities, Moody’s Says

MetLife Bank Has Foreclosure ‘Irregularities,’ Moody’s Says
The headquarters building of MetLife Inc. stands in New York. Photographer: Keith Bedford/Bloomberg

Oct. 15 (Bloomberg) -- MetLife Inc., the insurer with more than 200 home-loan offices in the U.S., is delaying the sale of some foreclosed properties and found “irregularities” in its processes of taking over houses, Moody’s Investors Service said.

“MetLife Home Loans temporarily postponed foreclosure sales in some states,” Moody’s said in a statement late yesterday. “Foreclosure process irregularities” could force the company to hold property longer, Moody’s said.

President Barack Obama this week endorsed a coordinated investigation by attorneys general from all 50 states into whether lenders used false documents to justify seizing homes. Last week, Bank of America Corp., the biggest U.S. lender, froze foreclosures nationwide. MetLife Home Loans may have its servicer-quality grade cut by Moody’s, the rating firm said.

“Irregularities in foreclosure processes could result in legal challenges to previously completed foreclosures and reputational risk for the servicing operation,” Moody’s said.

MetLife slipped 42 cents to $39.22 at 4:15 p.m. in New York Stock Exchange composite trading. Charlotte, North Carolina-based Bank of America fell 4.9 percent, while Wells Fargo & Co. declined 4.6 percent.

“MetLife Home Loans verifies mortgage information included in affidavits filed in foreclosure proceedings and is satisfied that the information is accurate,” said John Calagna, a spokesman for the New York-based insurer, in an e-mailed statement today. “Like many banks, MetLife Home Loans has been asked to closely review these procedures at this time and is doing so. MetLife Home Loans will take all appropriate action as a result of this review.”

Building the Bank

Delays and litigation may cost banks $10 billion, Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia, said yesterday. That’s up from his previous estimate of $6 billion.

MetLife has owned a bank for about 10 years, Chief Financial Officer William Wheeler said in December. The company announced two acquisitions in 2008, and had more than 4,000 employees near the end of last year, Donnalee DeMaio, president of MetLife Bank, said in December.

The bank in March named former Countrywide Financial Corp. executive Brian Hale as national production president.

To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net.

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net.

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