A potentially significant piece of usable evidence for lawsuits has come in the form of consent orders agreed between the Federal Reserve and ten banks. According to the Federal Reserve press release:
The banks are: Bank of America Corporation; Citigroup Inc.; Ally Financial Inc.; HSBC North America Holdings, Inc.; JPMorgan Chase & Co.; MetLife, Inc.; The PNC Financial Services Group, Inc.; SunTrust Banks, Inc.; U.S. Bancorp; and Wells Fargo & Company.
Additionally, the Federal Reserve on Wednesday announced formal enforcement actions against Lender Processing Services, Inc. (LPS), a domestic provider of default-management services and other services related to foreclosures, and against MERSCORP, Inc. (MERS), which provides services related to tracking and registering residential mortgage ownership and servicing, acts as mortgagee of record on behalf of lenders and servicers, and initiates foreclosure actions. These actions address significant compliance failures and unsafe and unsound practices at LPS and its subsidiaries, and at MERS and its subsidiary.
The consent orders are agreements between the Federal Reserve, the banks, the “fraud-mill” default management services companies Lender Processing Services (LPS) and MERSCORP. These consent decrees are potentially legally actionable (useful as exhibits in lawsuits), because they are an implicit admission to fraud.
To see all of the consent orders, please see the Federal Reserve press release above, though I will include three of them here:
- Consent Order for Bank of America Corp. (97 KB PDF)
- Consent Order for LPS (47 KB PDF)
- Consent Order for MERS (48 KB PDF)
Additionally, the Federal Reserve, together with Office of Thrift Supervision and Office of the Comptroller of the Currency, produced a report which details structural legal violations of the mortgage processing activities of a number of the mortgage servicers. In a footnote to the report, the Federal Reserve stated:
In light of the formal enforcement actions entered into by these 14 servicers, which are being made public, the agencies have determined that it is appropriate to identify the servicers (whether a bank or a bank affiliate) that were reviewed. The bank and thrift holding company parents of Ally Bank/GMAC, Bank of America, Citibank, Everbank, HSBC, JPMorgan, Chase, MetLife, OneWest, PNC, SunTrust, U.S. Bank, and Wells Fargo also entered into formal enforcement actions.
This is all potentially legally usable material to explain to a judge the Federal Government’s view of structural illegality and fraud for the majority of banks and loan servicers in the 2000’s.