MetLife Penalized $3.2M for Servicer's Infractions

by devteam August 7th, 2012 | Share

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

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of is prohibited.

About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

See all blogs


Leave a Comment

Leave a Reply

Latest Articles

Real Estate Investors Skip Paying Loans While Raising Billions

By John Gittelsohn August 24, 2020, 4:00 AM PDT Some of the largest real estate investors are walking away from Read More...

Late-Stage Delinquencies are Surging

Aug 21 2020, 11:59AM Like the report from Black Knight earlier today, the second quarter National Delinquency Survey from the Read More...

Published by the Federal Reserve Bank of San Francisco

It was recently published by the Federal Reserve Bank of San Francisco, which is about as official as you can Read More...