A government investigation underway at The PNC Financial Services Group Inc. is looking at foreclosure expenses on agency loans. A separate investigation is in process over potential disparate impact that resulted from loan pricing practices.
A subpoena was received by the Pittsburgh-based firm from the U.S. Attorney for the Southern District of New York.
The subpoena seeks information about claims for foreclosure expenses on loans that are guaranteed by the Federal Housing Administration, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp.
The subpoena was disclosed in a filing this week with the Securities and Exchange Commission.
PNC noted that the inquiry is in an early stage.
In addition, a joint investigation of PNC is being conducted by the Consumer Financial Protection Bureau and the Department of Justice, Civil Rights Division.
At issue is potential disparate impact on protected classes that resulted from the pricing on home loans by PNC and National City Corp., which PNC acquired in 2008.
The SEC filing indicated that PNC was advised in June that the CFPB had authorized settlement negotiations with PNC as successor to National City.
It was also notified by the Justice Department that the filing of a civil complaint had been authorized against PNC as successor to National City.
“Our practice is to cooperate fully with regulatory and governmental investigations, audits and other inquiries,” the filing said.
PNC warned that the inquiries could lead to “administrative, civil or criminal proceedings, and possibly result in remedies including fines, penalties, restitution, or alterations in our business practices, and in additional expenses and collateral costs.”
