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Govt lifts 'robosigning' restrictions on certain banks

Restrictions placed on certain banks for mortgage "robosigning" will lift as the firms have taken steps to fix their processes and pay restitution, the Office of the Comptroller of the Currency said Wednesday.

The agency's consent orders against Bank of America, Citibank and PNC Bank will be terminated.

Pedestrians walk in front of Wells Fargo headquarters in San Francisco, California.
David Paul Morris | Bloomberg | Getty Images
Pedestrians walk in front of Wells Fargo headquarters in San Francisco, California.

Other banks will face additional servicing restrictions as they have not met all of the requirements of their consent orders. Institutions including EverBank, HSBC Bank, JPMorgan Chase, Santander, U.S. Bank and Wells Fargo have not reached the standards set in their agreements, the OCC said.

However, it will not impede consumer access to mortgages as they will still be able to make loans.

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In 2010, banks had to halt numerous foreclosures when it became known signers had not actually reviewed paperwork. The 2011 OCC orders required some firms to fix flaws in their foreclosure reviews.

The Independent Foreclosure Review Payment Agreement has distributed more than $2.7 billion to 3.2 million eligible borrowers to date. The OCC estimates that $280 million from supervised institutions will remain unclaimed at the end of the year.

At that time, the remaining money will go to states so eligible borrowers can continue to claim it.

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