Servicing

OCC lifts mortgage servicing restrictions on U.S. Bank, Santander

Banks fined $13.4 million total for violations of Independent Foreclosure Review

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(Update: This article is updated with statements from U.S. Bank and Santander)

The Office of the Comptroller of the Currency announced Tuesday that it is terminating mortgage servicing-related consent orders against U.S. Bank National Association and Santander Bank, lifting the mortgage servicing restrictions placed on both banks last year due to failure to comply with requirements of the Independent Foreclosure Review.

The banks were also fined a total of $13.4 million for failing to correct “deficiencies” related to each bank’s compliance with 2011’s Independent Foreclosure Review in a “timely fashion.”

The OCC said Tuesday that it is assessing a $10 million civil money penalty against U.S. Bank for violations of the Independent Foreclosure Review that took place from Oct. 1, 2014 through Aug. 30, 2015.

Santander was also assessed a $3.4 million civil money penalty for violated the 2011 consent order from Oct. 1, 2014 through Dec. 31, 2015.

The banks will pay the assessed penalties to the U.S. Treasury.

While the banks both violated the IFR, the OCC determined that each bank is now in compliance with the IFR’s rules, and is therefore ending the business restrictions placed on each bank last year.

In June 2015, U.S. Bank and Santander were part of a group of six banks, which also included Wells Fargo, HSBCEverBank, and JPMorgan Chase, that were slapped with mortgage servicing restrictions by the OCC.

At the time, the banks were restricted from acquiring residential mortgage servicing or residential mortgage servicing rights; signing new contracts for the bank to perform residential mortgage servicing for other parties; outsourcing or sub-servicing of new residential mortgage servicing activities to other parties; off-shoring new residential mortgage servicing activities; and appointing new senior officers responsible for residential mortgage servicing or residential mortgage servicing risk management and compliance.

According to the OCC, those restrictions are now lifted.

In a statement, U.S. Bank Senior Vice President of Corporate Communications Dana Ripley said that the bank is “pleased” that the OCC has terminated the consent order.

“We are pleased to have this matter with the OCC resolved and remain committed to providing exceptional service to our residential mortgage customers,” Ripley said.

“Our employees have worked very hard over the past few years to implement improvements to our processes that will enhance our customers’ experiences, should some of our residential mortgage borrowers experience hardships, such as bankruptcy or loan default,” Ripley added. “U.S. Bank embraces the highest standards of compliance and we continuously explore ways to improve our processes in all aspects of our mortgage business, and across the entire enterprise, to benefit all of our customers.”

A spokeswoman for Santander said that the OCC announcement “reflects the progress” the bank has made.

“The announcement from the OCC reflects the progress we have made to enhance all aspects of how we support our customers,” Santander said in a statement. “We have implemented a significant number of practices to improve how our mortgages are serviced, particularly in support of customers facing financial hardship. This builds on our work across Santander US to further meet the expectations of customers, shareholders and regulators.”

Earlier this year, the OCC also released JPMorgan Chase and EverBank from similar restrictions after determining that each bank was also in compliance with the IFR.

At the time, the OCC assessed a $48 million civil money penalty against JPMorgan and a $1 million civil money penalty against EverBank.

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