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Federal Reserve fines five banks to wrap up mortgage servicing charges

Reuters  |  WASHINGTON 

By Pete Schroeder

(Reuters) - The Federal Reserve fined five large U.S. a combined $35.1 million to settle cases of mortgage servicing flaws dating back to 2011.

The central announced the fines against Goldman Sachs, Morgan Stanley, CIT Group, U.S. Bancorp, and as part of a broader effort to terminate enforcement actions begun in 2011 and 2012 against large for mortgage servicing shortcomings.

Ally Financial, of America, HSBC North America Holdings, and SunTrust had already paid penalties for similar issues. All 10 had enforcement actions under the ended on Friday, as the regulator cited "sustainable improvements" in their servicing practices.

Goldman is set to pay the largest fine of the five announced today, totaling $14 million. agreed to pay $8 million, CIT will pay $5.2 million, will pay $4.4 million, and PNC will pay $3.5 million.

All told, the said it had assessed $1.1 billion in fines against 14 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 announced it was terminating enforcement actions against a pair of mortgage servicers. 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 announced it had fined $90,000 for violations tied to the National Flood Insurance Act.

(Reporting by Pete Schroeder; Editing by Chizu Nomiyama)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, January 12 2018. 23:00 IST