Tags: foreclosure | homes | Wells Fargo | banks

Wells Fargo Leads Bank Foreclosure Halt After OCC Guidance

Friday, 17 May 2013 04:14 PM

Wells Fargo & Co., the biggest U.S. home lender, halted some foreclosure sales until it can understand new federal guidelines on seizures sent to the nation’s large and mid-sized banks.

The new rules from the Office of the Comptroller of the Currency dated last month laid out minimum standards that must be met before a foreclosed home can be sold, according to the agency. Citigroup Inc. also said today it’s evaluating the OCC’s directive.

The pause is needed “while we study the revised guidance from the OCC regarding imminent foreclosure sales,” Vickee Adams, a spokeswoman for San Francisco-based Wells Fargo, said today in a phone interview. “We expect it to be brief,” she said, declining to specify which states were affected.

Mortgage firms have previously imposed moratoriums amid reports of borrowers incorrectly being thrown out of their homes. Complaints pushed the five largest firms to sign a $25 billion settlement last year that ended a probe of their practices.

The impact of the new halt may be muted, with U.S. mortgages that are overdue or in foreclosure standing at a four-year low, according to data released May 9 by the Mortgage Bankers Association.

Bank of America Corp. didn’t suspend foreclosure activity, said Dan Frahm, a spokesman for the Charlotte, North Carolina-based lender. “We manage our mortgage servicing operations in compliance with all laws, regulations and standards for sound business practices,” Frahm said.

In Progress

Spokesmen for JPMorgan Chase & Co. and U.S. Bancorp didn’t immediately respond to requests for comment. American Banker, which reported on the halt earlier today, said JPMorgan had already resumed normal volume.

“We are in the process of complying and following the directive set forth in the OCC guidance,” Liz Fogarty, a spokeswoman for New York-based Citigroup, said in an e-mailed statement.

The OCC posed 13 questions that must be considered before banks sell homes, such as checking whether the loan’s delinquent status is correct and that other remedies have been considered. The review must be conducted for any sale planned within 60 days, according to the document.

Fed Action

“The purpose of this guidance is to ensure that borrowers will not lose their homes without their files receiving pre-foreclosure sale reviews conducted under the standards listed,” according to the April 19 document. If any of the answers to the questions raise concern, the scheduled sale must be canceled or delayed, the OCC said. The Federal Reserve released similar guidance April 23.

“The OCC did not direct a slowdown or pausing,” Bryan Hubbard, an OCC spokesman, said in an e-mailed statement. “If servicers are not certain they are meeting these standards, pausing foreclosures is a responsible and productive step.”

Mortgage servicers handle billing and collections on behalf of lenders or investors who own the loans, and oversee foreclosures.

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Wells Fargo & Co., the biggest U.S. home lender, halted some foreclosure sales until it can understand new federal guidelines on seizures sent to the nation's large and mid-sized banks.
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Friday, 17 May 2013 04:14 PM
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