Regions Discloses HUD Subpoena Related to MortgagesElizabeth Dexheimer
Regions Financial Corp., Alabama’s biggest bank, received a subpoena from the U.S. Department of Housing and Urban Development tied to the origination of mortgages backed by the Federal Housing Administration.
The lender is cooperating with the inquiry and expects “the outcome of pending and threatened litigation and inquiries will not have a material effect,” the Birmingham-based company said today in a quarterly filing.
Evelyn Mitchell, a Regions spokeswoman, declined to comment beyond what was disclosed in the filing, as did Marta Metelko, a spokeswoman for HUD’s Office of the Inspector General.
Federal agencies are pursing the largest U.S. lenders for claims tied to faulty underwriting and bias on home and auto loans. Attorney General Eric Holder said in an interview last month that holding banks accountable for actions that contributed to the financial crisis are a priority for him and President Barack Obama.
PNC Financial Services Group Inc. disclosed in August that it got a subpoena tied to foreclosure expenses on federally backed home loans and said two U.S. agencies were investigating whether its mortgages were unfairly priced. The Justice Department told the Pittsburgh-based lender in June that it may file a civil complaint tied to a probe into how the pricing of mortgages affected “protected classes,” according to a filing.
Regions was the worst performer in the 24-company KBW Bank Index, falling 1.4 percent to $9.41 at 11:34 a.m. in New York. The shares have climbed 32 percent this year.