MetLife Inc., the insurer with more than 200 home-loan offices in the U.S., is delaying the sale of some foreclosed properties and found “irregularities” in its processes of taking over houses, Moody’s Investors Service said.
“MetLife Home Loans temporarily postponed foreclosure sales in some states,” Moody’s said in a statement late yesterday. “Foreclosure process irregularities” could force the company to hold property longer, Moody’s said.
President Barack Obama this week endorsed a coordinated investigation by attorneys general from all 50 states into whether lenders used false documents to justify seizing homes. Last week, Bank of America Corp., the biggest U.S. lender, froze foreclosures nationwide. MetLife Home Loans may have its servicer-quality grade cut by Moody’s, the rating firm said.
“Irregularities in foreclosure processes could result in legal challenges to previously completed foreclosures and reputational risk for the servicing operation,” Moody’s said.
MetLife dropped $1.23, or 3.1 percent, to $38.41 at 10:30 a.m. in New York Stock Exchange composite trading. The firm was the biggest decliner in the 7-stock Standard and Poor’s 500 Life & Health Insurance Index. Charlotte, North Carolina-based Bank of America fell 6.4 percent, while Wells Fargo & Co. slipped 4.5 percent.
Delays and litigation may cost banks $10 billion, Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia, said yesterday. That’s up from his previous estimate of $6 billion.
Building the Bank
Ted Mitchell, a spokesman for MetLife’s bank unit, had no immediate comment. New York-based MetLife is the biggest life insurer in the U.S.
MetLife has owned a bank for about 10 years, Chief Financial Officer William Wheeler said in December. The company announced two acquisitions in 2008, and had more than 4,000 employees near the end of last year, Donnalee DeMaio, president of MetLife Bank, said in December.
The bank in March named former Countrywide Financial Corp. executive Brian Hale as national production president.
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