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Top Ten Foreclosing Banks

To determine the 10 banks foreclosing the most home loans, 24/7 Wall St. reviewed data provided by RealtyTrac, an online real estate marketplace and data source on distressed homes properties. All data are as of February 2013 and reflect the amount and value of both homes and mortgages serviced by the nation’s major banks. At RealtyTrac’s suggestion, because Bank of America acquired Countrywide’s assets and liabilities in 2008, we treated loans in foreclosure that were serviced by Countrywide as part of Bank of America’s portfolio. RealtyTrac also tracks the percentage of foreclosed properties it considers to be “seriously underwater” — defined as having a loan-to-value ratio of at least 125%. Additional data on the total amount of mortgage loans originated in 2012 and the size of the mortgage portfolio serviced by banks as of December 31, 2012, come from Mortgage Daily.

These are the banks foreclosing on the most homes.

10. SunTrust Banks Inc.
-Loans in foreclosure: 6,001
-Avg. property value: $207,157
-Pct. seriously underwater: 64%

More than 6,000 loans serviced by SunTrust Banks Inc. were in foreclosure as of February. Like most U.S. banks, SunTrust has been embroiled in controversy over its lending and foreclosure practices in recent years. SunTrust was one of five major lenders that in November agreed to pay a combined $162 million to settle complaints that it charged improper fees on home finance loans for veterans. Earlier in 2012, the bank agreed to pay $21 million to settle allegations that it overcharged more than 20,000 Hispanic and African American borrowers between 2005 and 2009.

9. PNC Financial Group
-Loans in foreclosure: 8,545
-Avg. property value: $185,306
-Pct. seriously underwater: 55%

PNC Financial Group Inc. serviced more than 8,500 loans in the foreclosure process as of last month. The average property value was just $185,306, one of the lowest of all banks, and the average debt on these mortgages was $202,286. Of the 8,545 loans in the foreclosure process, approximately 55% were considered seriously underwater. At the end of 2012, PNC was the 10th largest mortgage servicer in the country, with a portfolio size of $169.4 billion. PNC was recently required to pay $70 million in order to settle allegations of illegal foreclosure practices.

8. HSBC Holdings
-Loans in foreclosure: 16,317
-Avg. property value: $233,670
-Pct. seriously underwater: 60%

More than 16,000 loans serviced by HSBC Holdings PLC were in the foreclosure process as of February 2013. Six in 10 of these mortgages were considered seriously underwater. In January, the bank agreed to pay $249 million to settle complaints that it had wrongfully foreclosed on U.S. homeowners. Under the terms of the settlement, the bank paid out $96 million to 112,000 homeowners, while the remainder of the money went to reducing mortgage balances and forgiving outstanding principal on short sales, or selling a property for less than what is owed. Earlier this month, HSBC announced it was selling $3.2 billion worth of consumer loans to trim down U.S. operations.

7. Citigroup
-Loans in foreclosure: 27,697
-Avg. property value: $202,390
-Pct. seriously underwater: 54%

Citigroup Inc. serviced $6.3 billion in outstanding mortgage debt on homes in foreclosure, the seventh highest amount of all banks. Of homes in the foreclosure process, 54% were considered seriously underwater. While this figure is high, it was better than most of the nation’s largest banks. Citigroup is still fighting court battles regarding its mortgage practices as authorities accuse it of unfairly evicting people from their homes. These legal proceedings continue to hurt the company’s bottom-line.

6. Bank of New York Mellon
-Loans in foreclosure: 31,821
-Avg. property value: $236,703
-Pct. seriously underwater: 67%

At the end of 2012, Bank of New York Mellon Corp. had $1.4 trillion under management and more than $26 trillion under custody. A core focus of the company’s business is its function as a custodian, tasked with safeguarding financial assets and handling various monetary and financial transactions. During the financial crisis, the Treasury Department named the bank as custodian for its bailout fund — meaning the bank provided record keeping and cash management for the fund. But Bank of New York Mellon played another role in the crisis and its aftermath as a major mortgage servicer. According to RealtyTrac, nearly 32,000 homes serviced by the bank were in foreclosure as of February, 67% of which were seriously underwater.

5. Deutsche Bank
-Loans in foreclosure: 33,608
-Avg. property value: $228,446
-Pct. seriously underwater: 63%

In January 2007, Deutsche Bank A.G. bought home loan provider MortgageIT for $430 million. Soon after, the U.S. housing market collapsed. In May 2012, the bank agreed to pay the U.S. federal government more than $200 million to resolve charges that MortgageIT misrepresented the quality of mortgage loans it insured on behalf of the Federal Housing Administration. Three years ago, Deutsche Bank also paid the Federal Deposit Insurance Corporation $54 million to settle allegations against MortgageIT. According to RealtyTrac, Deutsche Bank serviced more than 33,000 loans in the foreclosure process across the country, twice the number of any other non-U.S. bank.

4. U.S. Bancorp
-Loans in foreclosure: 44,881
-Avg. property value: $206,754
-Pct. seriously underwater: 62%

Nearly 45,000 loans serviced by U.S. Bancorp with a cumulative property value of just under $9.3 billion, were in default as of February. About 28,000, or 62%, of all mortgages in foreclosure were considered seriously underwater. The bank was among the 10 financial institutions that agreed to pay $8.5 billion to settle allegations of widespread mortgage abuse in the foreclosure process, with U.S. Bancorp’s share of the payments totaling $80 million. The bank was the third-largest mortgage originator in 2012, lending $84.5 billion. This was up significantly from the $49.1 billion it lent in 2011.

3. JPMorgan Chase
-Loans in foreclosure: 54,325
-Avg. property value: $208,183
-Pct. seriously underwater: 54%

As of February 2013, J.P. Morgan Chase & Co. serviced nearly 55,000 mortgages that were in the foreclosure process, worth $11.4 billion. Fortunately for the bank, just 54% of those homes in foreclosure were considered seriously underwater, a significantly lower percentage than banks such as Bank of New York Mellon and Deutsche Bank. The bank was able to provide more loans in 2012 than it did in previous years. That year, the bank was responsible for 10% of all mortgage loans in the United States, worth $182.2 billion. This was up from the $146.7 billion the company had lent in 2011.

2. Wells Fargo
-Loans in foreclosure: 84,903
-Avg. property value: $205,550
-Pct. seriously underwater: 56%

Wells Fargo & Co. serviced $19.9 billion in total mortgage debt, a higher figure than any other bank except for Bank of America. Wells Fargo’s past lending practices received intense scrutiny in the past several years. The bank was one of the 10 servicers that participated in the $8.5 billion mortgage settlement announced in January. The bank was also required to pay $175 million in 2012 to settle accusations that it discriminated against African American and Hispanic customers between 2004 and 2009. Despite these troubles, Wells Fargo was the largest mortgage lender in the U.S. during 2012, originating 28% of all mortgages, worth $524 billion.

1. Bank of America
-Loans in foreclosure: 96,319
-Avg. property value: $203,956
-Pct. seriously underwater: 61%

Bank of America Corp. serviced more loans for homes in foreclosure than any other bank in America as of February, at more than 96,000. In all, these properties had more than $23 billion in mortgage debt, and 60% of them were seriously underwater. The bank’s purchase of mortgage lender Countrywide Financial has been especially criticized. As of mid-2012, the acquisition was believed to have cost Bank of America over $40 billion. According to Mortgage Daily, the bank is taking a step back in both mortgage lending and servicing. In 2012, it cut the amount of mortgage loans it originated from $156.1 billion to $78.7 billion, while cutting its mortgage servicing operations by 21%.

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