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 HelpWithMyBank.gov |
Correcting Foreclosure PracticesUpdated January 24, 2013 Independent Foreclosure Review As part of April 2011 consent orders, federal regulators required servicers to engage independent firms to conduct a multi-faceted review of foreclosure actions in process in 2009 and 2010. That initiative included a process for eligible borrowers to request a review of their foreclosure if they believe the suffered financial injury as a result of errors on a foreclosure of their primary residence that was in process at any point in 2009 or 2010. In January 2013, 13 mortgage servicing companies subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing have reached an agreement in principle with the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board to pay more than $9.3 billion in cash payments and other assistance to help borrowers. The settlement concluded the Independent Foreclosure Review for these 10 servicers and will result in $3.6 billion in cash payments to nearly 4.2 million eligible borrowers and $5.7 billion in additional assistance. See frequently asked questions about the settlement. This agreement includes Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. For these participating servicers, fulfillment of the agreement would meet the requirements of the enforcement actions that mandated that the servicers retain independent consultants to conduct an Independent Foreclosure Review. A payment agent will be appointed to administer payments to borrowers on behalf of the servicers. Eligible borrowers are expected to be contacted by the payment agent by the end of March with payment details. Borrowers will not be required to execute a waiver of any legal claims they may have against their servicer as a condition for receiving payment. In addition, the servicers’ internal complaint process will remain available to borrowers. Borrowers who have questions about their eligibility or contact information can call the toll-free Independent Foreclosure Review number at 1-888-952-9105. The agencies continue to work to reach similar agreements in principle with other servicers that are not parties to the agreement announced today, but that are also subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing. The Independent Foreclosure Review Process continues for the following servicers at this time: Ally, Everbank, OneWest. OCC and Federal Reserve examiners are continuing to closely monitor the servicers’ implementation of plans required by the enforcement actions issued in April 2011 to correct the unsafe and unsound mortgage servicing and foreclosure practices. Financial Remediation Framework For servicers whose Independent Foreclosure Review continues, the consultants will use the framework to recommend remediation for financial injury identified during the Independent Foreclosure Review. The servicers will prepare remediation plans based on the consultants’ recommendations. The federal banking regulators must approve each servicer’s remediation plan. The framework helps ensure that similarly situated borrowers receive similar treatment.
Request for Review Reponse Data The OCC and Federal Reserve have released data on the number of eligible borrowers who have requested a review by state and county through the end of September 2012. Click to view that data. Engagement Letters The OCC released engagement letters that describe how the independent consultants, retained by the servicers, will conduct their reviews and claims processes in accordance with the OCC’s consent orders. See the engagement letters. Interim Report On June 21, 2012, the OCC released its second interim report on the status of the Independent Foreclosure Review and actions required by consent orders issued in April 2011 to correct deficient mortgage servicing and foreclosure processes. Read the report. Resources for Housing Counselors The OCC with the Board of Governors of the Federal Reserve System provided a variety of information to housing counselors, legal aid attorneys, and other advisors assisting borrowers with completing the Request for Review form for the Independent Foreclosure Review process.
OutreachTo promote awareness of the Independent Foreclosure Review and in addition to direct mail, regulators required servicers to conduct advertising that included national publications as well as publications that serve minority and Spanish speaking audiences. Supplementing this effort, the OCC sponsored two rounds of public service advertising distributed to 10,000 small publications and 6,500 small radio stations throughout the country. View PSA material from the OCC. In addition, the Federal Reserve released a public service video explaining how to apply for a review. About the Enforcement ActionsThe enforcement actions were based on interagency examinations conducted in the fourth quarter of 2010. A summary of the findings of the interagency reviews is available in the Interagency Review of Foreclosure Policies and Practices, which was produced by the OCC, the Board of Governors of the Federal Reserve System, and the OTS. Links to the OCC and former OTS Enforcement Actions:
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