Tags: US | Banks | More | Time | File | Foreclosure | Plans

US Banks Get More Time to File Foreclosure Plans

Monday, 13 Jun 2011 01:00 PM

U.S. regulators will give banks more time to comply with a crackdown on their mortgage servicing practices.

On Monday the Office of the Comptroller of the Currency said it was extending by 30 days the time the banks have to file plans for how they will meet the requirements laid out in an agreement entered into on April 13 with the agency.

The banks originally had 60 days to comply with the order.

The OCC said the Justice Department is requesting the delay, which would provide more time for it and state governments to advance their own negotiations with the banks to settle accusations of foreclosure shortcuts.

A group of 50 state attorneys general and federal agencies have been probing bank mortgage practices that came to light last year, including the use of "robo-signers" to sign hundreds of unread foreclosure documents a day.

The OCC, the Federal Reserve and the Office of Thrift Supervision announced on April 13 that 14 large housing lenders had agreed to overhaul their mortgage operations and compensate borrowers who were wrongly foreclosed upon.

What fines the banks may have to pay has yet to be determined.

The state AGs and the Justice Department are in talks with Bank of America Corp, Wells Fargo & Co, JPMorgan Chase, Citigroup Inc and Ally Financial about a separate settlement.

Last month the banks had proposed a settlement figure of $5 billion, which was far below the $20 billion range the states and their partner federal agencies had discussed.

Earlier this year the banking regulators and the states had hoped to announce a settlement with the banks at the same time but in April the banking agencies decided to move first.

At the time Acting Comptroller of the Currency John Walsh said that the compliance plans banks would have to submit under their agreement with the banking agencies could include elements of whatever settlement the lenders struck with the states and the Justice Department.

© 2015 Thomson/Reuters. All rights reserved.

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