OCC Chastises Servicers???

Posted by kevin on June 19, 2015 under Foreclosure Blog | Comments are off for this article

For what appears to be the up-teenth time, the OCC has imposed sanctions on 6 servicers for assorted violations relating to modifications including failures a)to respond to requests for information, b)to make good faith effort to prevent foreclosure in the first place and c) to track existing modification applications.

Wells Fargo and HSBC got one thump across the buttocks in that they are prohibited from acquiring servicing rights, entering into new servicing contracts, and banned from offshoring servicing rights. In addition, these banks need OCC approval to hire senior mortgage servicing officers.

JPMorgan Chase, US Bank, Santander Holdings and Everbank got slaps on the wrist. They also must get OCC approval to hire senior staff and must also get OCC approval to buy servicing rights, enter into new servicing contracts, outsourcing servicing rights and offshoring servicing rights.

Either the banks/servicers have become immune to punishment or the punishment is too lenient because I have not seen any real downturn in unlawful activities notwithstanding the continued crackdown.

I am reminded of a client that I had in a shareholder dispute. She could not resist blurting out her opinion about witness testimony during the trial. The Judge became more than a little upset. He held her in contempt and fined her $100. The Judge shot me a look right afterwards indicating that he had put the fear of God into her. Well, my client was humbled for the rest of the day. Then, the next day, she started commenting again. The first transgression got a warning. However, I knew that the warning was falling on deaf ears because while my client was yessing the Judge, she was getting her checkbook out of her pocketbook. By the last day of a 6 day bench trial, she was held in contempt 3 or 4 times and warned about a dozen other times. Clearly, $100 was not enough of a fine to change her behavior.

OCC is just chastising these banks. The punishment makes for a good press release but the offenders will find a way around the sanction. So, the laws will continue to be violated to the detriment of the consumer public. Only when some bank or better yet bank executive gets his ass kicked by the regulator with a loss of employment or incarceration will the situation get better. Unfortunately, that ain’t gonna happen.