U.S. Bancorp will pay $10 million while Banco Santander settled for $3.4 million following missteps in how they handled earlier orders from regulators to fix faulty foreclosure practices, according to the Office of the Comptroller of the Currency.
The two lenders' fines stem from violations of 2013 accords over mortgage-servicing flaws, the agency said in a statement Tuesday. The new penalties close out a series of mortgage- servicing restrictions the companies were placed under in June after they failed to live up to earlier agreements that had involved foreclosure faults after the 2008 financial crisis.
U.S. Bank and Santander's U.S. operation formerly known as Sovereign Bank were among a group of major mortgage servicers accused of mishandling loan papers or robo-signing — fraudulently endorsing affidavits used in foreclosures. After an aborted effort to force the banks to review individual files for wrongdoing, most of the companies agreed in 2013 to pay a combined $10 billion in settlements with regulators and to fix their practices.
Several of them later fell short in meeting those settlements, according to regulators. The OCC, which oversees national banks, already penalized six of those companies in June, restricting their purchases of servicing rights until they fulfilled the rest of their agreements. Tuesday's deal frees U.S. Bancorp and Madrid-based Santander from those constraints.
Last month, JPMorgan Chase & Co. faced a similar action, paying $48 million to resolve its own failures and put the years-old foreclosure settlement behind it. Bank of America Corp., Citigroup Inc., PNC Financial Services Group Inc. and OneWest Bank — acquired by CIT Group Inc. last year — are among the firms that already met their requirements, the OCC said last year. Other banks — including Wells Fargo, the biggest U.S. mortgage lender — failed to satisfy the agreements and still have their servicing activities restricted.