Wells Fargo & Co. agreed to pay a $70 million penalty in ending the bank’s five-year fight to settle legal claims over foreclosure missteps after the 2008 credit crisis.
U.S. regulators announced the fine for the San Francisco- based bank on Wednesday as part of an agreement that also frees the nation’s biggest mortgage lender from loan-servicing restrictions imposed last year.
The Office of the Comptroller of the Currency had accused Wells Fargo of failing to move fast enough in fixing deficiencies outlined in a series of settlements overimproper activity including so-called robo-signing of foreclosure documents. The agency, which said the bank is now in compliance, had also identified more recent problems, including faulty payment-change notices filed in bankruptcy courts and faulty escrow calculations.
Wells Fargo said it was pleased that the regulator accepted its work on the settlement. The bank neither admitted nor denied wrongdoing in the OCC agreement.
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Five years ago, Wells Fargo and most of the other largest U.S. mortgage servicers agreed to resolve allegations that they mishandled loan papers and fraudulently endorsed legal papers used in foreclosures after the crisis. Regulators amended that accord in 2013 after deciding the original plan failed to help affected borrowers.
Last June, the OCC lifted its consent orders against Charlotte-based Bank of America, Citibank and PNC Bank. But it took additional actions against Wells Fargo, JPMorgan Chase and four other banks for failing to make required fixes in their mortgage servicing businesses.
The regulator blocked the six companies from buying mortgage-servicing rights because they hadn’t yet met the demands of that most recent foreclosure settlement. They were also banned from appointing senior mortgage-servicing officers until they finished the work.
JPMorgan agreed to a $48 million fine in January to resolve the deficiencies identified by regulators and free it from the servicing restrictions. Further settlements in February left only Wells Fargo and HSBC Holdings Plc still facing the OCC’s limits.
Wells is based in San Francisco but has its largest employment hub in Charlotte. Its mortgage operations are headquartered in Iowa but the business has a presence in Charlotte and Fort Mill, S.C. The Observer contributed.