Bank regulators reach settlements with mortgage lenders

Reuters News
Posted: Apr 13, 2011 1:11 PM
Bank regulators reach settlements with mortgage lenders

WASHINGTON (Reuters) - Bank regulators announced settlements on Wednesday with the largest home lenders over allegations of shoddy foreclosure practices, but the pacts did not include financial penalties.

The banks agreed to compensate borrowers who were wrongly foreclosed upon and to overhaul their mortgage operations. Fines are to be determined later.

The Office of the Comptroller of the Currency, the Federal Reserve and the Office of Thrift Supervision reached the settlements with 14 of the largest U.S. financial institutions, including Bank of America Corp, Wells Fargo & Co, JPMorgan Chase and Citigroup Inc.

Federal regulators and state attorneys general have been investigating bank mortgage practices, including the use of "robo-signers" to sign hundreds of unread foreclosure documents a day, that came to light last year.

"Our enforcement actions are intended to fix what is broken, identify and compensate borrowers who suffered financial harm, and ensure a fair and orderly mortgage servicing process going forward," acting OCC head John Walsh said in a statement.

(Reporting by Dave Clarke in Washington and Joe Rauch in Charlotte; Editing by Tim Dobbyn)