Announcement of Fairbanks Settlement Expected

Federal regulators are expected to announce Wednesday that they have reached a settlement with the nation's largest subprime servicer, Fairbanks Capital Corp., MortgageWire has learned.The Federal Trade Commission and the Department of Housing and Urban Development launched an investigation of the Salt Lake City servicing shop in March in response to news reports that Fairbanks engaged in abusive servicing practices, including charging homeowners high fees and forcing them into foreclosure for failing to pay those fees. The two regulators have scheduled a news conference for Nov. 12 to announce a settlement, but they would not confirm that it involves Fairbanks. The PMI Group, a major shareholder of Fairbanks based in Walnut Creek, Calif., revealed on Oct. 22 that "FTC and HUD civil charges will require changes in Fairbanks' operations and the creation of a $40 million fund to benefit consumers allegedly harmed by Fairbanks."