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Federal Reserve fines five banks to wrap up mortgage servicing charges



The Federal Reserve fined five large U.S. banks a combined 35.1 million dollars to settle cases of mortgage servicing flaws dating back to 2011, reports said.

The central bank announced the fines against Goldman Sachs (GS.N), Morgan Stanley (MS.N), CIT Group (CIT.N), U.S. Bancorp (USB.N), and PNC Financial (PNC.N).

The fine comes as part of a broader effort to terminate enforcement actions begun in 2011 and 2012 against large banks for mortgage servicing shortcomings.

Ally Financial (ALLY.N), Bank of America (BAC.N), HSBC North America Holdings, JPMorgan Chase (JPM.N) and SunTrust Banks (STI.N) had already paid penalties for similar issues.

All 10 banks had enforcement actions under the Fed ended on Friday, as the regulator cited “sustainable improvements” in their servicing practices.

Goldman was set to pay the largest fine of the five announced on Saturday, totaling 14 million dollars.

Morgan Stanley agreed to pay eight  million dollars, CIT will pay 5.2 million dollars, U.S. Bancorp will pay 4.4 million dollars, and PNC will pay 3.5 million dollars.

All told, the Fed said it had assessed 1.1 billion dollars in fines against 14 banks for mortgage servicing shortcomings, which became widely known in the wake of the 2007-2009 financial crisis as more homeowners struggled to stay current on their loans.

At the same time, the Fed announced it was terminating enforcement actions against a pair of mortgage services.

Lender Processing Services, Inc., succeeded by ServiceLink Holdings LLC, and MERSCORP Holdings, Inc., formerly known as MERSCORP Inc., both faced enforcement actions from financial regulators for issues tied to foreclosure-related services.

In a separate enforcement action, the Fed announced it had fined Goldman Sachs 90,000 dollars for violations tied to the National Flood Insurance Act.

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