Wells Fargo Pays $70 Million for Failures in Foreclosure Accordby
Settlement with OCC clears earlier mortgage-servicing limits
Penalty against lender ends complex five-year foreclosure saga
Wells Fargo & Co. agreed to pay a $70 million penalty in ending the bank’s five-year fight to settle legal claims over foreclosure missteps after the 2008 credit crisis.
U.S. regulators announced the fine for the San Francisco-based bank on Wednesday as part of an agreement that also frees the nation’s biggest mortgage lender from loan-servicing restrictions imposed last year.
The Office of the Comptroller of the Currency had accused Wells Fargo of failing to move fast enough in fixing deficiencies outlined in a series of settlements over improper activity including so-called robo-signing of foreclosure documents. The agency, which said the bank is now in compliance, had also identified more recent problems, including faulty payment-change notices filed in bankruptcy courts and faulty escrow calculations.
Wells Fargo is pleased that the regulator accepted its work on the settlement, according to a statement. The bank neither admitted nor denied wrongdoing in the OCC agreement.
Five years ago, Wells Fargo and most of the other largest U.S. mortgage servicers agreed to resolve allegations that they mishandled loan papers and fraudulently endorsed legal papers used in foreclosures after the crisis. Regulators amended that accord in 2013 after deciding the original plan failed to help affected borrowers.
A year ago, the OCC imposed new restrictions on Wells Fargo, JPMorgan Chase & Co. and four other companies, blocking them from buying mortgage-servicing rights because they hadn’t yet met the demands of that most recent foreclosure settlement. They were also banned from appointing senior mortgage-servicing officers until they finished the work.
JPMorgan agreed to a $48 million fine in January to resolve the deficiencies identified by regulators and free it from the servicing restrictions. Further settlements in February left only Wells Fargo and HSBC Holdings Plc still facing the OCC’s limits.