As HousingWire readers were alerted last August, U.S. regulators are, in fact, expanding their investigation into charges connected with foreclosure actions.
Three more banks are being investigated, bringing the official list to: PNC Financial Services, PHH Corp., Santander Holdings, Citizens Financial Group, a unit of Royal Bank of Scotland and MetLife.
Specifically the investigations looked into how foreclosure law firms billed for allowable “costs” in conjunction with the foreclosure – with the lever being loans insured or guaranteed by Fannie Mae, Freddie Mac or the Federal Housing Administration.
And at the time the HousingWire article was published, there were similar investigations into foreclosure billing practices in key states on the Eastern seaboard, and it was predicted to not end there.
Now, according to an article in Reuters, U.S. Attorney Preet Bharara's office is investigating into the five banks, with all of them receiving subpoenas seeking additional information on claims on foreclosed loans.
Three banks reported they received subpoenas in May in their SEC disclosures, but do not provide much detail on the scope of the probe.
“The best-case scenario is that current investigations don't find evidence of wrongdoing, and in the meantime the industry will have strengthened its controls and procedures,” the past HW article said.
“But if there has been wrongdoing — if some law firms crossed the line and improperly padded their costs, or if some servicers were negligent and lacked appropriate controls, or both — there will be a price to pay, regardless,” it continued.