Big bank hit with $70 million penalty over foreclosure missteps

by Ryan Smith26 May 2016
Wells Fargo has agreed to pay a $70 million penalty to end its five-year battle to settle claims over foreclosure failures in the wake of the financial crisis.

Regulators announced the penalty Wednesday, according to a Bloomberg report. The $70 million fine is part of an agreement that will free Wells Fargo, the nation’s largest mortgage lender, from servicing restrictions imposed on it last year.

Wells Fargo’s troubles in the case began when the Office of the Comptroller of the Currency accused the bank of not moving fast enough to remedy problems outlined in several settlements over improper activity, including the robo-signing of foreclosure documents, Bloomberg reported. The agency said the bank is now in compliance.

Five years ago, Wells Fargo and other banks settled allegations that they’d fraudulently endorsed legal papers used in home foreclosures and mishandled loan papers. But last year, the OCC imposed restrictions on Wells, along with JPMorgan Chase and four other banks, because they hadn’t yet met settlement demands.

Other affected banks have since settled, including JPMorgan, which paid $48 million in January to resolve the case. Wells Fargo’s settlement leaves only HSBC still facing OCC restrictions, Bloomberg reported.

Wells Fargo said in a statement that it was pleased that the OCC accepted its work on the settlement.