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OCC Frees Wells Fargo from Servicing Restrictions

several-banksThe Office of the Comptroller of the Currency (OCC) announced on Wednesday that it has terminated the mortgage servicing-related consent order against Wells Fargo. At the same time, the OCC issued a civil money penalty of $70 million to the bank for previous violations of the order.

The consent order against Wells Fargo was terminated by the OCC after it was determined that the bank is now in compliance with the order. Wells Fargo was one of 12 mortgage servicers penalized by the OCC and the Office of Thrift Supervision (OTS) in April 2011 for deficient mortgage servicing and foreclosure practices. The consent orders handed down against the servicers at that time were based on findings by an examiner during an interagency review of major mortgage servicers conducted during Q4 2010, at the height of the foreclosure crisis.

The 2011 consent orders were amended in February 2013 and June 2015. Wednesday’s announcement involves the termination of a consent order ending restrictions on Wells Fargo’s servicing operations that the OCC placed on the bank as a result of the June 2015 amendments.

“We are pleased that the OCC has validated the effectiveness of the significant changes we have made to our mortgage servicing operations and confirmed our release from the Consent Order,” Wells Fargo spokesman Tom Goyda said. “Our team worked very hard to complete the requirements of the original Consent Order and the amendments, and continues to provide the best possible service to our customers.”

“Our team worked very hard to complete the requirements of the original Consent Order and the amendments, and continues to provide the best possible service to our customers.”

Tom Goyda, Wells Fargo Spokesman

The restrictions mandated by the consent order included limitations on the acquisition of residential MSR portfolios, new contracts to perform residential mortgage servicing for other parties, the outsourcing or sub-servicing of new residential mortgage servicing activities to other parties, off-shoring new residential mortgage servicing activities, and new appointments of senior officers responsible for residential mortgage servicing. OCC said the restrictions will vary based on the individual circumstances of each bank, and the agency will continue to monitor the corrective actions for these institutions. The OCC told DS News that the restrictions did not impede consumers' access to mortgage loans.

At the same time the consent order was terminated on Wednesday, the OCC penalized Wells Fargo $70 million (to be paid to the U.S. Treasury) after finding that the bank failed to timely correct the deficiencies identified in the 2011 consent orders. The OCC also determined that between December 2011 and March 2015, Wells Fargo filed payment change notices in bankruptcy courts that were not in compliance with safe and sound banking practices; also, the OCC found that between March 2013 and October 2014, Wells Fargo made escrow calculations that led to some borrowers being incorrectly denied for loan modifications, which constituted unsafe/unsound banking practices.

Click here to view the termination of the consent order against Wells Fargo.

Click here to view the consent order for the civil money penalty.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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