WASHINGTON—The Office Comptroller of the Currency imposed
restrictions on the mortgage-servicing operations of six banks,
including the national bank arms of J.P. Morgan Chase & Co. and
Wells Fargo & Co., for failing to fully comply with enforcement
orders related to home foreclosure abuses.
The OCC said on Wednesday the six banks had not met all the
requirements of consent orders issued in 2011 related to
foreclosure-processing mistakes. The 2011 orders triggered a
controversial probe into major U.S. banks' foreclosure files to
determine how many borrowers should be compensated and were amended
in 2013 when the OCC and the Federal Reserve decided to halt the
review before it was finished. The regulators ultimately reached a
settlement with 15 banks related to foreclosure problems.
The national bank units of EverBank Financial Corp., HSBC
Holdings PLC, Santander Holdings USA Inc. and U.S. Bancorp were
also hit with additional penalties for failing to complete
"required corrective actions," the OCC said.
OCC didn't immediately indicate what corrective actions each
bank had failed to complete.
The penalties on the six banks involve restrictions on their
mortgage servicing operations, including limits on the banks'
ability to acquire residential mortgage servicing rights or
outsource their existing mortgage servicing rights. Many banks have
pulled back significantly from the mortgage-servicing industry in
recent years but OCC officials said in a conference call that
mortgage servicing remains a "significant activity" for each of the
six banks.
"For a number of these institutions, increasing the servicing
book is still a significant part of their business strategy," said
Morris Morgan, a deputy comptroller for large banks.
"We've made significant progress, which has earned us the
highest ratings among large banks by the U.S. Department of the
Treasury's MHA Program and JD Power, and we believe we're in a
position to complete our remaining items by the end of the summer,"
a J.P. Morgan spokeswoman said in an emailed statement.
HSBC and Wells Fargo face the harshest restrictions of the six.
Both are flatly prohibited from increasing the size of their
mortgage book by purchasing servicing rights, entering into new
contracts to do servicing for other parties and offshoring
additional servicing activities. The other four banks must seek
supervisory approval to take such actions. OCC officials said the
difference reflects both the number and severity of the outstanding
problems at those two banks.
OCC officials also said that additional enforcement actions will
be taken against the six at a future date related to the
foreclosure and mortgage-servicing problems but just what those are
will depend on how quickly they address outstanding issues.
In addition, the OCC said it was lifting consent orders against
three big banks related to the foreclosure probe—the national bank
units of Bank of America Corp., Citigroup Inc. and PNC Financial
Services Corp.
"Regulators recognized Bank of America's improvement in the way
we operate our mortgage business to better assist customers,
particularly in times of financial difficulty. We have helped more
than 2 million customers avoid foreclosure and put legacy mortgage
issues behind us, including products and programs inherited from
Countrywide," a spokesman said in an email.
The OCC announced it would effectively end its role in the
settlement program related to the foreclosure probe at the end of
the year. The regulator said it would transfer any remaining
uncashed payments to the states so borrowers can collect them
there. The regulator expects to have about $280 million left at the
end of the year to send to the states.
The OCC said that, to date, the program has distributed more
than $2.7 billion to more than 3.2 million borrowers from banks
overseen by the regulator, representing more than 90% of the total
funds available.
Write to Victoria McGrane at victoria.mcgrane@wsj.com
Access Investor Kit for Banco Santander SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=ES0113900J37
Access Investor Kit for HSBC Holdings Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GB0005405286
Access Investor Kit for Banco Santander SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US05964H1059
Access Investor Kit for Bank of America Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0605051046
Access Investor Kit for Citigroup, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US1729674242
Access Investor Kit for HSBC Holdings Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US4042804066
Access Investor Kit for JPMorgan Chase & Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US46625H1005
Access Investor Kit for The PNC Financial Services Group,
Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US6934751057
Access Investor Kit for Wells Fargo & Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US9497461015
Subscribe to WSJ: http://online.wsj.com?mod=djnwires