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WBK Industry News - Federal Regulatory Developments

Successor Company Fined for Predecessor Company’s Robo-Signing Activities

On January 24, 2017, federal banking agencies—including the Federal Deposit Insurance Corporation, Federal Reserve and Office of the Comptroller of the Currency (the Federal Banking Agencies)—fined a successor company $65 million for improper actions taken by its predecessor company. The improper actions, including the robo-signing of foreclosure documents, resulted in significant deficiencies in foreclosure-related activities the predecessor provided to mortgage servicers. The fine was assessed via a new agreement amending a prior April 2011 consent order against the predecessor (the 2011 Consent Order).

Specifically, the successor company became subject to the 2011 Consent Order on January 3, 2014, as a result of a corporate acquisition and reorganization through which it assumed the predecessor company’s default management subsidiaries and affiliates that are subject to the 2011 Consent Order. The new agreement, entered on January 24, 2017, amends certain aspects of the 2011 Consent Order, and eliminates the requirement that an independent consultant be retained to conduct a review of the document execution services, including services used in judicial and non-judicial foreclosures and related bankruptcy proceedings. While the successor company will still be monitored by the Federal Banking Agencies with respect to certain aspects of the 2011 Consent Order, the new agreement provides that no further action will be taken based on actions of the predecessor company that led to the issuance of the 2011 Consent Order.

A copy of the new agreement can be viewed here: https://www.occ.gov/news-issuances/news-releases/2017/nr-ia-2017-13.html.