New York, NY- The Federal Reserve said Tuesday it would fine investment bank Morgan Stanley for “a pattern of misconduct and negligence” in the way the bank handled foreclosures.
The Fed also ordered the bank to review foreclosure documents served to thousands of homeowners to ensure the paperwork was processed properly and mortgage holders were not subjected to wrongful foreclosure.
Since the rob-signing scandal broke many homeowners have discovered that they lost their homes to improperly processed paperwork. Although some people, along with their foreclosure attorneys, have been able to prevent eviction, there are numerous people who did not realize that mortgage servicers repeatedly used fraudulent documents to seize their homes.
Federal officials have launched investigations onto the way that smaller mortgage companies handled foreclosure documents, so it is likely that additional small banks will also be fined and ordered to review past foreclosure documents.
If cases are found where Morgan Stanley used fraudulent documents to take back a home, the Fed will require the bank to “provide appropriate remediation to the borrower for any unreasonable penalties, fees or expenses, or for other financial injuries.”
The amount in fines that Morgan Stanley must pay to the Fed has not been disclosed.
An impending foreclosure can make a person feel paralyzed, but by consulting with a foreclosure lawyer these individuals can determine what steps they can take and stay in their homes. Foreclosure attorneys will be able to give a homeowner options to keep a bank from seizing their property.