Tuesday, September 6, 2011

Federal Reserve, NYS Bank Regulator Announce Robosigner Settlements With Goldman, Loan Servicers

The Wall Street Journal reports:

  • The Federal Reserve announced an enforcement action against Goldman Sachs Group Inc., saying the company's mortgage-servicing unit had engaged in "a pattern of misconduct and negligence" in its handling of home-mortgage loans.

  • The Fed's action on Thursday seeks changes in mortgage-servicing practices and unspecified monetary damages. It came as Goldman reached an agreement with New York state banking regulators over wrongful foreclosures,(1) allowing it to complete the Sept. 1 sale of its Litton Loan Servicing unit to Ocwen Financial Corp. A spokesman for Goldman Sachs declined to comment.

  • The Fed action is the latest response by government officials investigating mortgage-servicing irregularities including "robo-signing," in which bank employees signed foreclosure documents without reviewing case files as required by law. Federal and state officials continue to pursue a settlement with the nation's largest mortgage companies over allegations they mishandled home loans.

For more, see Fed Hits Goldman With Mortgage Order (may require paid subscription; if no subscription, GO HERE; or TRY HERE - then click the appropriate link).

(1) See Superintendent Lawsky Announces Agreement with Goldman Sachs, Ocwen, Litton on Groundbreaking New Mortgage Practices (Sale of Goldman’s Subsidiary, Litton, Conditioned on New Servicing Practices; Goldman to Significantly Reduce Loan Amounts for Those Hit by Financial Crisis).

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