Regulators impose limits on mortgage business for 6 banks

By Marcy Gordon
AP Business Writer

WASHINGTON (AP) — Federal regulators have slapped restrictions on the mortgage businesses of six banks, saying they haven’t fully complied with requirements imposed on them to resolve allegations that they abused the foreclosure process after the collapse of the housing market.

The Office of the Comptroller of the Currency, part of the Treasury Department, announced the action Wednesday against the banks: JPMorgan Chase, Wells Fargo, U.S. Bank, HSBC, Santander and EverBank.

The agency said the banks haven’t met all the requirements of the 2011 enforcement orders issued by the government, which found that some lenders rushed the foreclosure process without carefully reviewing documents. The case was known as the “robo-signing” scandal.

The restrictions include limits on buying rights from other banks to service mortgages. They vary according to the specific situation of each of the six banks. A chart issued by the OCC shows that the restrictions are tougher for Wells Fargo and HSBC than for the other banks.

At the same time, the agency lifted its enforcement orders against Bank of America, Citigroup and PNC, finding them to be in compliance with the orders.

The “robo-signing” scandal prompted a government investigation and eventually an $8.5 billion settlement between the OCC and 15 banks.

In addition, the federal government and 49 states reached a $25 billion settlement over foreclosure practices in 2012 with five banks: Bank of America, Citigroup, JPMorgan, Wells Fargo and Ally Financial.