Independent Foreclosure Review Underway
WASHINGTON — The Office of the Comptroller of the Currency today announced that the independent foreclosure review required under the agency’s enforcement actions taken in April 2011 has begun.
Under the enforcement actions taken in April by the OCC, the Federal Reserve, and Office of Thrift Supervision, 14 large mortgage servicers were required to correct deficiencies in their servicing and foreclosure processes and to engage independent firms to conduct a multi-faceted independent review of foreclosure actions that occurred in 2009 and 2010. Independent consultants are charged with evaluating whether borrowers suffered financial injury through errors, misrepresentations, or other deficiencies in foreclosure practices and determining appropriate remediation for those customers. Where a borrower suffered financial injury as a result of such practices, the consent orders require remediation to be provided.
"The independent foreclosure review is a significant component of the mortgage servicers’ compliance with our enforcement actions," said acting Comptroller of the Currency John Walsh. "These requirements help ensure that the servicers provide appropriate compensation to borrowers who suffered financial harm as a result of improper practices identified in our enforcement actions."
Today, the 14 mortgage servicers covered by the enforcement actions began mailing letters to eligible borrowers that explain how to request a review of their case if they believe they suffered financial injury as a result of errors, misrepresentations, or other deficiencies in foreclosure proceedings related to their primary residence between January 1, 2009 and December 31, 2010. Borrowers may also visit www.IndependentForeclosureReview.com for more information about the review and claim process. Assistance with requesting a review and answers to questions about the process are available at 1-888-952-9105, Monday through Friday from 8 a.m. to 10 p.m. (ET) and Saturday from 8 a.m. to 5 p.m. (ET).
Requests for review must be received by April 30, 2012.
In addition to this outreach and claims program, independent consultants will also review a variety of sample cases from each servicer. Where they identify issues, they will conduct additional secondary reviews to identify as many affected borrowers as possible.
"The challenge is substantial, but the steps we have required the servicers to take are vitally important to resolving these issues in a way that respects the rights of those who have been harmed and helps to restore confidence in the system."
Mr. Walsh said the reviews will take several months to complete, considering the large pool of borrowers that could be part of the review.
The enforcement actions also require the servicers to correct other deficiencies in residential mortgage loan servicing and foreclosure practices. Work related to correcting these deficiencies is also underway and includes enhancing oversight of third-party foreclosure service providers, upgrading management information systems associated with mortgage servicing and foreclosure processing, and improving communication with customers by establishing a single point of contact and eliminating "dual tracking," in which servicers continue to pursue foreclosure even though a borrower may have been approved for, or is performing under the terms of a modification or trial modification, among other steps.
Mr. Walsh added that while independent consultants will be responsible for conducting the independent review and servicers will be accountable for taking other corrective actions required in the consent orders, the OCC and other federal regulators will continue to hold the mortgage servicers accountable for complying with all aspects of our orders. In addition, he said, "we will oversee the independent consultants to make certain they conduct the reviews in an independent and responsible manner."