The Federal Reserve Board on Thursday announced a formal enforcement action against the Goldman Sachs Group, Inc. and Goldman Sachs Bank USA to address a pattern of misconduct and negligence relating to deficient practices in residential mortgage loan servicing and foreclosure processing involving its former subsidiary, Litton Loan Servicing LP.
Goldman Sachs sold Litton to Ocwen Financial Corporation on September 1, 2011 and has ceased to conduct residential mortgage servicing. Litton is the 23rd largest mortgage servicer in the United States.
The action orders Goldman Sachs to retain an independent consultant to review foreclosure proceedings initiated by Litton that were pending at any time in 2009 or 2010. The review is intended to provide remediation to borrowers who suffered financial injury as a result of wrongful foreclosures or other deficiencies identified in a review of the foreclosure process. The foreclosure review will be conducted consistent with the reviews currently underway at the 14 large mortgage servicers that consented to enforcement actions [6] brought by the banking agencies on April 13, 2011.
If Goldman Sachs re-enters the mortgage servicing business while the action is in effect, it will be required to implement enhanced corporate governance, risk-management, compliance, borrower communication, servicing and foreclosure practices comparable to what the 14 mortgage servicers are implementing.
As noted in the April press release, the Federal Reserve believes monetary sanctions are appropriate and plans to announce monetary penalties.
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1 comment:
OF COURSE, the Fed thinks "monetary penalties" are in order. Guess who is gonna get paid? Disband the Reserve (the BIGGEST scam ever) and JAIL th eheads of Goldman AND the Reserve.
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