Apparently the banks are preparing for the expected ‘slap on the wrist’…
Three of the nation’s largest banks said Friday that they expect to be sanctioned by the U.S. government for their foreclosure practices, securities filings show.
The disclosures come on the heels of reports federal regulators are nearing a multi-billion dollar deal to settle allegations that the biggest banks abused borrowers and illegally foreclosed on homes.
The months-long federal probe found significant and widespread deficiencies in how firms service home loans, which involves collecting payments, modifying delinquent loans, and foreclosing on borrowers upon default. A “small number” of foreclosures should not have occurred, a top bank regulator told a Senate committee last week after his agency surveyed less than 3,000 loan files.
The filings are the first acknowledgment by the targeted banks that they’re likely to face significant penalties arising from the investigations.
Wells Fargo & Co., the fourth-largest bank by assets, said it is “likely” at least one government agency “will initiate some type of enforcement action against Wells Fargo, which may include civil money penalties.” The firm added that its litigation expenses could reach $1.2 billion beyond what it’s already set aside for lawsuits and investigations, according to its filing with the Securities and Exchange Commission. Wells Fargo handles $1.8 trillion in home loans, second-most in the U.S., according to Inside Mortgage Finance, a trade publication and data provider.