Dutch bank ABN Amro has agreed a deal with US authorities worth a total of $41 million to settle a case of mortgage document falsification.
ABN Amro, which is one of the ten biggest mortgage lenders in the US, has agreed to pay the US government $16.85 million in compensation for the paperwork irregularities while also agreeing not to claim $24.35 million worth of insurance repayments for default loans from authorities.
In a statement ABN revealed that it voluntarily informed the US authorities in 2003 of the mortgage paperwork problems which in certain cases involved single underwriters signing falsely for second parties. Following the settlement the US authorities said that they would not be seeking prosecutions against individuals concerned but that ABN was conducting its own disciplinary process.
The saga centered on US government secured mortgage loans issued to homebuyers by ABN Amro. To facilitate government coverage, ABN was legally required to certify that each loan met federal standards by having two underwriters sign the relevant paperwork. However, in a move to speed up the process second signatures were falsified on 28,000 mortgage documents.
In an interview reported by the Washington Post, Thomas Goldstein, chairman and chief executive of ABN Amro Mortgage Group, said that during a very hot market for purchases and refinancing, a few employees . . . on the lower level decided to speed up the loan-approval process by signing documents themselves instead of submitting them to a federally-approved underwriter for a second review. Many of them thought they weren’t doing anything wrong, he said.
We didn’t follow the rules, Mr Goldstein said, but he added that procedures had been tightened and the responsible employees had been fired.