The Comptroller of the Currency is preparing to levy civil money penalties against some of the nation's largest servicers for violations of state and local foreclosure laws.
"While all servicers exhibited some deficiencies, the nature of the deficiencies and severity of issues varied by servicer," acting comptroller John Walsh told the Senate Banking Committee on Thursday.
Sen. Jack Reed, D-R.I., asked the comptroller about news reports that OCC is planning to level "modest fines."
The senator said the monetary penalties should go beyond recognition of negligence. "Are you measuring these fines in terms of the overall impact on people who have lost their homes," Reed asked.
Walsh denied the news reports. "We have not made decisions about the level of penalties. That is the next phase to come," he testified.
He noted that OCC will be working with the Federal Reserve Board and penalties will be meted out at the holding company and servicer level. (OCC regulates eight large servicers, which combined, have a market share north of 50%.)
In terms of remediation, the agency will require servicers to fix identified problems and deficiencies, providing appropriate remedies for customers who have been financially harmed.
Separately, banking regulators, along with the Federal Trade Commission, Department of Justice and state Attorneys General are working on a global settlement with the servicers. This comprehensive settlement will address a "full range of legal claims arising from the mortgage crisis." Walsh said.
