Regulators lift mortgage restrictions from PNC
Regulators have lifted restrictions that were imposed on PNC Financial Services Group in 2011 over abusive mortgage foreclosure practices by banks that may have led to some people wrongfully losing their homes during the housing crisis.
PNC was among several banks whose mortgage servicing operations were placed under heightened regulatory scrutiny because of allegations they rubber-stamped foreclosure cases without properly reviewing loan documents — a practice dubbed robo-signings.
The Office of the Comptroller of the Currency, which helped negotiate a $9.3 billion settlement with 13 big banks in 2013 over the alleged misdeeds, said it was freeing PNC from tighter regulatory supervision because the bank has taken sufficient steps to improve its operations.
“We are gratified by today's announcement from the OCC,” PNC spokesman Fred Solomon said in a statement. “It reflects PNC's improved home loan servicing process as well as our commitment to meet the expectations of our regulators, support home ownership and build stronger communities.”
As part of the broad settlement with the big banks, PNC paid $69.4 million into a fund and agreed to provide loss-mitigation and other foreclosure-prevention measures valued at $111 million.
The lifting of the restrictions happens at a time when PNC is aiming to grow its mortgage business.
PNC wasn't in the mortgage business until its purchase of National City Corp. in 2008. Residential mortgage banking remains its least profitable segment, accounting for $28 million of PNC's $1 billion in first-quarter profit. But bank officials have recently talked about using the mortgage business to attract new business and deepen relationships with existing customers.
“I don't suspect this is going to have a material effect on PNC, partly because it's not a huge business for them,” said bank analyst Jennifer Thompson, of Portales Partners. “It wasn't restricting their absolute profitability.”
The OCC lifted restrictions on Bank of America and Citibank. Meanwhile, it imposed additional limits on six banks, saying that they had fallen short in addressing the past abuses. Those banks included EverBank, HSBC, JPMorgan Chase, Santander, U.S. Bank National Association and Wells Fargo. The restrictions won't prevent them from making mortgages but will limit their ability to buy rights from other banks to service mortgages.
Chris Fleisher is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or cfleisher@tribweb.com.
