The case for fixing Fannie and Freddie instead of shutting them down Fannie and Freddie are the largest consumers of mortgage loans, mortgage servicing, foreclosure law firms, and a host of other housing-related services.
Fees for legal services in foreclosure are also under scrutiny.
Recon Trust is a Countrywide entity that provides document custody, default and lien release services in foreclosure.
Wells's fines included $1.4bn for allegations of misleading investors in securities auctions, $5bn for loan services and foreclosure "abuses", and $1.2bn for defrauding the US government regarding mortgages eligible for federal insurance.
The state of Florida banned upfront fees for loan mods in 2008, but the law exempts lawyers who provide foreclosure-related services if the foreclosure relief is "ancillary" to the lawyer's representation of the homeowner as a client.
But past sins in servicing and foreclosure are largely absolved.
Meanwhile, states are trying to negotiate a settlement with banks over flawed mortgage servicing and foreclosure practices.
Some of the breakdowns, the documents said, "placed consumers at significant risk of servicing and foreclosure abuses".
"We are receiving fewer complaints about mortgage originators," Mr. Suthers testified, "and we now have voluminous complaints about mortgage servicing and foreclosure relief scams".
And, yet, along comes a 27-page outline of remedies that the banks would have to abide by in their loan servicing and foreclosure businesses.
These mistakes, according to confidential regulatory records from a 2014 examination, put "borrowers at significant risk of servicing and foreclosure abuses".
