MetLife fined $3.2 million for "unsound" foreclosures: Fed

WASHINGTON Tue Aug 7, 2012 10:10am EDT

A statue stands atop Grand Central Station in front of the MetLife building in New York, October 8, 2008. REUTERS/Lucas Jackson

A statue stands atop Grand Central Station in front of the MetLife building in New York, October 8, 2008.

Credit: Reuters/Lucas Jackson

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WASHINGTON (Reuters) - The Federal Reserve said on Tuesday MetLife Inc, the largest U.S. life insurer, will be charged $3.2 million for "unsafe and unsound" practices in loan servicing and foreclosures.

The regulator said the firm failed to adequately oversee such operations at its subsidiary bank, adding that this is the maximum penalty it could assess in circumstance under existing law given the size of MetLife's foreclosure activities.

Profit at MetLife doubled in the second quarter to $2.26 billion after a huge gain on derivatives tied to falling interest rates, and operating results beat Wall Street expectations on double-digit growth in the Americas.

In February, five big U.S. banks agreed on a $25 billion deal to end a year-long investigation into faulty foreclosure practices, such as the so-called robo-signing of loan documents.

The settlement, which came after more than a year of negotiations, involved Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co , Citigroup Inc and Ally Financial Inc.

(Reporting by Pedro Nicolaci da Costa; Editing by James Dalgleish)

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