MetLife Penalized $3.2M for Servicer's Infractions
MetLife, Inc. has agreed to pay $3.2rnmillion to the Federal Reserve as a monetary sanction for failing to adequatelyrnoversee operations of its subsidiary mortgage loan servicing unit’s foreclosurernprocessing. The Fed charged thesernoversight deficiencies represented unsafe and unsound practices and orderedrncorrective measures in a formal enforcement action in April 2011.</p
In a press release from the Board ofrnGovernors the Fed said that the monetary sanctions take into account thernmaximum statutory limits for unsafe and unsound practices, the comparativernseverity of MetLife’s misconduct and size of its foreclosure activities andrnwere similar to those levied in sanctions against five other servicingrnorganizations. The earlier actions, popularlyrnknown at the $25 billion servicer settlement, required those five organizationsrnto provide payments and designated monetary assistance and remediation tornmortgage borrowers. The Board said thernmonetary sanctions against MetLife “contemplate the possibility of a similarrnsettlement under which MetLife agrees to provide borrower assistance orrnremediation.”</p
Specifically, if by June 30, 2013rnMetLife enters into a settlement with the attorneys general and Justice Departmentrnsimilar to the $25 billion settlement it will have two years to expend thernportion of that settlement designated forrnborrower assistance or remediation after which the residual must be paid to thernFederal Reserve. If no settlement isrnreached with the attorneys general then MetLife will likewise be required tornpay to the Fed any residuals designated for borrower assistance or remediationrnunder the sanctions announced today. Anyrnmoney paid by MetLife to the Board will be remitted to the U.S. Treasury. </p
The Federal Reserve said it has movedrnagainst MetLife at this time because of the company’s publicly announced decisionrnto sell its subsidiary deposit-taking operations which, if approved byrnregulators, would mean the company would no longer be a bank holding company.</p
It appears that seven companies remain against whom the Board has not takenrnaction. The press release said the Boardrn”continues to believe that monetary sanctions in the remaining cases arernappropriate and plans to announce monetary penalties against those organizations.”rn
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