The Federal Reserve issued monetary sanctions of $3.2 million against MetLife (MET) for foreclosure abuses at its former bank and servicer subsidiary.
MetLife was part of the consent orders handed down from the Fed and the Office of the Comptroller of the Currency in April 2011 to crack down on robo-signing and other problems at the 14 largest mortgage servicers. Promised monetary penalties came down on the five largest servicers but will only be charged if they do not provide the relief agreed to under a separate $25 billion settlement with state attorneys general and the Justice Department.
In December, MetLife sold its banking subsidiary. The sale is still pending regulatory approval.
The Fed said the $3.2 million fine “takes into account the maximum amount prescribed for unsafe and unsound practices under the applicable statutory limits,” the severity of the misconduct and how many foreclosures MetLife actually filed over the last two years.
“MetLife has exited the residential mortgage origination business and is in the process of exiting retail banking. We are pleased to put this matter with the Federal Reserve behind us,” a company spokesman said in a statement.
If MetLife enters into the settlement with the DOJ and state AGs by June 2013, it must pay the Fed what it doesn’t provide under the settlement within two years of signing it.
If the insurance giant does not enter into a settlement and hasn’t made the full $3.2 million payment to the Fed by August 2014, it must send the outstanding amount to nonprofit organizations to help counsel struggling homeowners.
MetLife reported $2.3 billion in profits during the second quarter.
The Fed said it will announce monetary fines against the remaining servicers involved in the consent orders.