(Corrects name of National City in second paragraph, adds type
of loan protection to third paragraph, changes language
describing amount of money related to lawsuit in ninth
By Aman Shah
Aug 8 PNC Financial Services Group Inc
said it received a federal subpoena seeking information about
claims for foreclosure expenses related to federally backed
The bank also said it was being investigated by the Justice
Department and a government regulator over the pricing of
mortgages loans issued by PNC and National City Corp, the
company it bought in 2008.
The subpoena from the U.S. Attorney's office for the
Southern District of New York deals with loans insured or
guaranteed by the Federal Housing Administration, Freddie Mac
and Fannie Mae.
The disclosure about the inquiry comes a week after PHH Corp
said it had received a similar subpoena from the same US
Attorney office related to foreclosure expenses.
In June, the Department of Justice authorized the filing of
a civil complaint against PNC, while the Consumer Financial
Protection Bureau authorized settlement negotiations with the
Both the DOJ and CFPB are investigating whether mortgage
loan pricing by National City and PNC "had a disparate impact on
protected classes", PNC disclosed in a filing with the U.S.
Securities and Exchange Commission on Thursday. (r.reuters.com/zym32v)
National City, then the seventh-largest bank in the United
States, was bought by PNC in a $5.2 billion takeover during the
financial crisis in 2008.
The PNC disclosures follow similar announcements by larger
banks that come after President Barack Obama vowed to hold
companies responsible for breaking the law in financing the
housing bubble that caused the financial crisis.
Government lawyers filed a civil lawsuit against Bank of
America Corp this week over its sale of $850 million
worth of residential mortgage-backed securities.
JPMorgan Chase & Co, the biggest U.S. bank by
assets, said on Wednesday it faces a criminal probe by the DOJ
over sales of mortgage-backed securities.
PNC shares were up about a percent at $76.24 in
late-afternoon trading on the New York Stock Exchange on
(Editing by Bob Burgdorfer)