Federal regulators on Wednesday ordered OneWest Bank, the largest savings and loan headquartered in Southern California, to overhaul its foreclosure processes after finding numerous deficiencies in its mortgage servicing business.
In a consent order agreed to by the Pasadena thrift institution, the Office of Thrift Supervision listed a number of “unsafe or unsound practices,” including repeated failures to devote sufficient resources to its mortgage servicing division and to provide training and oversight to its servicing professionals.
OneWest also was found to have carried out foreclosures without adequately reviewing records or providing necessary documentation.
The action requires the thrift to develop a plan to address the deficiencies within its servicing business as well as increase oversight of third-party vendors. OneWest did not respond to requests for comment.
The thrift services a $141 billion portfolio of residential mortgage loans, mostly inherited from IndyMac Bank. OneWest was launched in 2009 after a team of private equity investors acquired the assets of IndyMac, the disgraced lender that failed in July 2008 due to heavy loan losses.
OneWest was one of 14 large mortgage servicers hit with enforcement orders on Wednesday as part of a joint effort by the OTS, the Office of the Comptroller of the Currency and the Federal Reserve to crack down on mortgage servicing abuses. Also sanctioned was Bank of America Corp., whose mortgage operations are headquartered in Calabasas, and Wells Fargo & Co., one of the largest mortgage lenders and servicers in Southern California.
The actions do not include fines, but the Federal Reserve said in a statement that it “believes monetary sanctions in these cases are appropriate and plans to announce monetary penalties.”
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