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US banks face fines in probes
Source: Agencies |
February 28, 2011, Monday
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PROBES by state attorneys general and other government agencies into United States banks' foreclosure practices carry the risk of fines and other major costs, according to regulatory filings from three of the country's biggest banks.
Revelations that major US banks rammed through hundreds of foreclosures daily without giving many borrowers a fair shot at keeping their homes triggered investigations from all 50 states' attorneys general and from state and federal regulators. They also sparked pressure from lawmakers and class-action lawsuits.
Bank of America Corp, Citigroup Inc and Wells Fargo & Co called out possible financial repercussions in annual filings with the Securities and Exchange Commission last Friday. None of them provided any details on how much was at risk.
"Those investigations and any irregularities that might be found in our foreclosure processes, along with any remedial steps taken in response to governmental investigations or to our own internal assessment, could have a material adverse effect on our financial condition and results of operations," BofA said.
The Charlotte, North Carolina-based bank said it is dedicating significant resources to comply with investigations, and warned that the probes could result in "material fines, penalties" and expose the company to new lawsuits and more legal costs.
"Our costs increased in the fourth quarter of 2010 and we expect that additional costs incurred in connection with our foreclosure process assessment will continue into 2011 due to the additional resources necessary to perform the foreclosure process assessment, to revise affidavit filings and to implement other operational changes," BofA said in the filing.
New York-based Citigroup said investigations and scrutiny of its own foreclosure processes have "resulted in, and may continue to result in, the diversion of management's attention and increased expense, and could result in fines, penalties, other equitable remedies, such as principal reduction programs, and significant legal, negative reputational and other costs."
Wells Fargo also said it is being investigated by several government agencies for its foreclosure practices.
Revelations that major US banks rammed through hundreds of foreclosures daily without giving many borrowers a fair shot at keeping their homes triggered investigations from all 50 states' attorneys general and from state and federal regulators. They also sparked pressure from lawmakers and class-action lawsuits.
Bank of America Corp, Citigroup Inc and Wells Fargo & Co called out possible financial repercussions in annual filings with the Securities and Exchange Commission last Friday. None of them provided any details on how much was at risk.
"Those investigations and any irregularities that might be found in our foreclosure processes, along with any remedial steps taken in response to governmental investigations or to our own internal assessment, could have a material adverse effect on our financial condition and results of operations," BofA said.
The Charlotte, North Carolina-based bank said it is dedicating significant resources to comply with investigations, and warned that the probes could result in "material fines, penalties" and expose the company to new lawsuits and more legal costs.
"Our costs increased in the fourth quarter of 2010 and we expect that additional costs incurred in connection with our foreclosure process assessment will continue into 2011 due to the additional resources necessary to perform the foreclosure process assessment, to revise affidavit filings and to implement other operational changes," BofA said in the filing.
New York-based Citigroup said investigations and scrutiny of its own foreclosure processes have "resulted in, and may continue to result in, the diversion of management's attention and increased expense, and could result in fines, penalties, other equitable remedies, such as principal reduction programs, and significant legal, negative reputational and other costs."
Wells Fargo also said it is being investigated by several government agencies for its foreclosure practices.
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