Federal regulators are getting ready to strike their mighty blow on eight financial firms that weren’t part of the nation’s $25 Billion settlement with the five largest mortgage lenders in February. (Read our blog article in the February Archives, “Banks reach settlement, have to PAY homeowners”). The “big five” lenders were: Bank of America Corporation, JPMorgan Chase & Company, Wells Fargo & Company, Citigroup Inc. and Ally Financial Inc. (formerly GMAC).
The eight firms now cited are; HSBC’s United States bank division, SunTrust Bank, MetLife, EverBank, Goldman Sachs, OneWest, U.S. Bancorp, and PNC Financial Services. An investigation, started nearly two years ago, found flaws, inaccurate and/or forged documents, irregularities and sloppy practices in the foreclosure process spanning the last five years.
Judges, attorneys and advocates for homeowners say people are still losing their homes despite improper documentation and other errors in the foreclosure process, often involving these eight firms cited by the Federal Reserve.
Suzanne G. Killian, a senior associate director of the Federal Reserve’s Division of Consumer and Community Affairs testified before lawmakers last month stating the eight firms should be fined for “unsafe and unsound practices in their loan servicing and foreclosure processing”.
Goldman Sachs’ name was a complete surprise to many as they were never a major player in the mortgage processing industry like the five lenders included in the settlement. Additionally, Goldman Sachs sold their loan processing section called Litton Loan Servicing LP to Ocwen Financial Corporation in 2011 for approximately $264 million. They had taken a $200 million write-down and loss before selling.
Other companies involved in the beginning of the crash have disappeared such as Bear Sterns and Lehman Brothers, but Goldman Sachs survived relatively unharmed. Goldman Sachs continues to make astounding profits with a minimum of legal troubles from both state and federal governments.
Goldman Sachs has agreed to accept future penalties and fines in their role of wrongful foreclosure properties when they sold to Litton Loan Servicing in 2011.
Although the larger servicers pledged to amend their practices, there are indications the foreclosure cases with other companies continue to be very questionable. Court cases involving the eight firms have been riddled with dubious practices by the firms.
Last November, federal banking regulators forced the nation’s largest servicers, including the eight new firms to go through and correct their problem foreclosure records.
Consumers who believe they experienced financial injury have until July 31 to request an independent review of their foreclosure. “So far, more than 128,000 people have requested a review” stated the Office of the Comptroller of the Currency.
Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.
This article is not intended as legal advice. The opinions of this article are solely the opinion of the author.