Yet Another Settlement for Improper Foreclosures

by on Foreclosures

Yet Another Settlement for Improper Foreclosures

In what amounts to another notch on the belt of regulators who have attempted to crack down on lenders who participated in illicit and improper foreclosure processes, EverBank Financial was hit with a $43 million settlement with the Office of the Comptroller of the Currency.

The settlement comes after a two-year investigation by the OCC and the Federal Reserve into the practices at EverBank, which is a financial services company based in Jacksonville, FL with revenue of $883 million in 2013.

According to the report, the bank participated in improper procedures that impacted more than 32,000 homeowners whose homes were placed in foreclosure in 2009 and 2010. A significant percentage of the overall payment – nearly 15% – is to be paid to affordable housing organizations throughout the country.

EverBank did not compensate any homeowner whose file they reviewed during their foreclosure review process, which eventually caused regulators to convince the bank to cease its review long after other major lenders scrapped the independent review process set forth by major agreements in 2011.

As it stands now, the independent foreclosure review process only has one servicer out of 16 original participants – OneWest Bank – who is still participating in the review process. GMAC Mortgage was the latest to abandon ship with its $9.6 billion mortgage relief and compensation settlement.

It’s difficult to say how much further the industry has to go before these settlements become a thing of the past. What is certain is that EverBank probably won’t be the last bank to announce a costly arrangement, given the broad scope of foreclosure abuses and the free hand most lenders had in the past decade to essentially manipulate the system for their benefit.

This doesn’t just apply to fraudulent mortgages, though; it also extends to misleading investors, which is the charge the U.S. government placed against Bank of America earlier this year. BoA is being sued due to allegedly misleading investors in 2008 over mortgage-backed assets and properties that were not nearly as sound and viable as they were presented to be.

At least EverBank Financial is avoiding that problem – for now.

Heading into the last months of 2008, there could be at least one more action taken against a lender for foreclosure processes, given the sheer size of the controversy. Regardless, the continued proceedings against lenders for their actions constitutes an ongoing chapter of the country’s sordid mortgage affair.