MetLife Fined $3.2 Million for Inadequate Mortgage and Foreclosure Services
The Federal Reserve has fined MetLife $3.2 million for failing to adequately oversee its mortgage loan servicing and foreclosure processing operations.
This is the maximum penalty allowed for what are deemed 'unsafe' and 'unsound' practices in regard to handling residential mortgages and foreclosures.
The Fed took action against MetLife in April, one of 14 corrective actions issued against large mortgage service companies for the way they handled residential mortgage loans servicing and foreclosure processing.
The Fed's assessment against MetLife could require the company to provide payments and designated types of monetary assistance and remediation to residential mortgage borrowers. This was the case in similar assessments orders taken in February 2012 against five other mortgage servicing firms.
The Fed's assessments against these five organizations were issued in conjunction with a comprehensive settlement agreement between the companies and the state attorneys general and the U.S. Department of Justice.
If MetLife settles with the attorneys general and the Department of Justice by June 30, 2013, MetLife will have to pay the Fed an additional amount to be used for borrower assistance or remediation in compliance with the settlement agreement.
If there is no settlement agreement by June 30, 2013, MetLife will be required to pay the Fed the portion of the $3.2 million that it has not expended by August 6, 2014, to cover the cost of counseling for distressed homeowners.
The Fed said that it chose to act now because MetLife has announced plans to sell its subsidiary bank's deposit-taking operations. When that sale becomes final, the Fed loses its jurisdiction in the case.