Fed fines five over mort­gage fore­clo­sures

The Washington Post - - ECONOMY & BUSINESS -

The Fed­eral Re­serve is clos­ing the book on sanc­tions against U.S. banks over im­proper han­dling of mort­gage fore­clo­sures, fin­ing firms that in­clude one once chaired by Trea­sury Sec­re­tary Steven Mnuchin.

In an en­force­ment case that has stretched seven years, the Fed said Fri­day that it is fin­ing five com­pa­nies. More than $35 mil­lion in new penal­ties in­clude $14 mil­lion for Gold­man Sachs, $8 mil­lion for Mor­gan Stanley, $4.4 mil­lion for U.S. Ban­corp, $3.5 mil­lion for PNC and $5.2 mil­lion for CIT, which had pur­chased One West Bank, the firm that bought Indy Mac.

Mnuchin was chair­man of One West and U.S. Comp­trol­ler of the Cur­rency Joseph Ot­ting was its chief ex­ec­u­tive when the firm faced fore­clo­sure sanc­tions.

Af­ter the banks were ac­cused of botch­ing thou­sands of fore­clo­sures in 2011, the Fed and other reg­u­la­tors re­quired lenders to fix their ser­vic­ing of res­i­den­tial mort­gages.

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