WASHINGTON—The Federal Reserve has fined five large U.S. banks a combined $35.1 million to settle cases of mortgage servicing flaws dating back to 2011.
The central bank announced the fines against Goldman Sachs, Morgan Stanley, CIT Group, U.S. Bancorp and PNC Financial as part of a broader effort to terminate enforcement actions begun in 2011 and 2012 against large banks for mortgage servicing shortcomings, NewsMax reported.
Ally Financial, Bank of America, HSBC North America Holdings, JPMorgan Chase and SunTrust Banks had already paid penalties for similar issues. All 10 banks had enforcement actions under the Fed which recently ended, as the regulator cited “sustainable improvements” in their servicing practices, NewsMax reported.
Goldman is set to pay the largest fine of the five, totaling $14 million. Morgan Stanley agreed to pay $8 million, CIT will pay $5.2 million, U.S. Bancorp will pay $4.4 million, and PNC will pay $3.5 million, NewsMax reported.
All told, the Fed said it had assessed $1.1 billion in fines against 14 banks for mortgage servicing shortcomings, which became widely known in the wake of the 2007-2009 financial crisis as more homeowners struggled to stay current on their loans, noted NewsMax.