Banks did a poor job of handling the flood of foreclosures over the last several years, in some cases even moving ahead with evictions when they clearly should not have, according to a long-awaited report released Wednesday by federal regulators.
In response to the problems detailed in the report, 14 mortgage servicers have now signed consent agreements promising changes, including new oversight procedures.
Regulators said the enforcement actions were tough measures that would make the banks accountable. “The banks are going to have to do substantial work, bear substantial expense, to fix the problem,” the acting comptroller of the currency, John Walsh, told reporters in a conference call.
JPMorgan Chase, one of the servicers signing the agreement, said that it was adding as many as 3,000 employees to meet the new regulatory demands. Jamie Dimon, its chief executive, called it “a lot of intensive manpower and talent to fix the problems of the past.”
Other servicers who signed agreements included Bank of America, Citigroup and GMAC. Two firms that handle aspects of the foreclosure process, Lender Processing Services and Mortgage Electronic Registration Systems, also signed consent agreements. But consumer activists were unimpressed, saying the reforms let the banks police themselves.