As part of an approval order with federal bank regulators, the Office of Financial Currency Supervisory (OCC), OTS Office (the independent Bureau of the US Treasury Department), and the Board of Governors of the Federal Reserve System, fourteen mortgage servicers and their affiliates identified customers who are part of a foreclosure action at their primary residence between 1 January 2009 and 31 December 2010.
The Federal Reserve announced on April 9 that Rust Consulting will begin delivering checks on April 12, 2013.
On April 25, 2013, Representative of Elijah Cummings introduced legislation to make monitors for the Independent Seizure Review: HR 1706, "The Law on Controlling Rights of the Year 2013"
The Independent Foreclosure Review gives homeowners the opportunity to request an independent review of their foreclosure process. If the review finds that financial injury is due to errors or other problems during the foreclosure process of their home, the homeowner may receive compensation or other medications.
Video Independent foreclosure review
Background and timeline
On February 28, 2013, the OCC and the Federal Reserve announced a replacement program for 13 banks and servicers, while 3 original banks decided to maintain the Foreclosure Independence Review Process. The reimbursement program includes US $ 3.6 billion in direct cash payments to homeowners and $ 5.7 billion in loss mitigation assistance intended to keep people in their homes.
The Independent Foreclosure review was made in response to the 2010 Foreclosure Crisis in an effort to provide assistance to homeowners who have received their Standard Notice, or are in danger of foreclosure.
On April 13, 2011, the Office of Currency Finance, the Board of Governors of the Federal Reserve System, and the Austerity Supervisory Office announced enforcement actions against 14 large mortgage housing servicers and two third party vendors for insecure and unhealthy. practices related to housing mortgage services and foreclosure processing; customers of 27 mortgage servicers (listed below) may qualify for compensation.
Third-party consultants assess whether errors, misinterpretations, or other deficiencies result in financial injury to the borrower. When a borrower suffers a financial injury as a result of such a practice, an approval order requires an improvement to be made. During the review, customers may be contacted by the mortgage servicers for additional information in the direction of an independent consultant.
Requests for review must be postmarked or submitted online by 31 December 2012.
Interim report
On June 21, 2012, OCC released its second interim report on the Independent Seizure Review status and actions required by an approval order issued in April 2011 to improve the process and foreclosure of less-deficient mortgages.
Agency publishes financial remediation framework
On June 21, 2012, the Office of the Currency Financial Supervisor and Board of Governors of the Federal Reserve System released a financial remediation framework [1] which provides an example of a mistake in a foreclosure covered by a regulatory approval order that requires compensation or other remediation as directed at regulatory orders April 2011. The consultants use a framework to recommend remediation for financial injuries identified during the Foreclosure Independence Review. The servicers prepare a remediation plan based on consultant recommendations. The federal banking regulator must approve the remediation plan of each service person. This framework helps ensure that borrowers with similar locations receive similar treatment.
Maps Independent foreclosure review
Feasibility for review
To be eligible, the mortgage must be active in the foreclosure process between 1 January 2009 and 31 December 2010, the property that gets the loan should be the primary residence, and the mortgage should be served by one of the following mortgage servicers:
- American Service Company
- Aurora Credit Service
- BAC Home Credit Service
- Bank of America
- Beneficial Finance
- Pursue
- Citibank
- CitiFinancial
- CitiMortgage
- Entire country
- EMC Mortgage Corporation
- EverBank/EverHome Mortgage Company
- Financial Freedom
- GMAC Mortgage
- HFC
- HSBC
- IndyMac Mortgage Service
- MetLife Bank
- National City Mortgage
- PNC Mortgage
- Sovereign Bank
- SunTrust Mortgage
- US. Bank
- Wachovia Mortgage
- Washington Mutual (WaMu)
- Wells Fargo Bank, N.A.
- Wilshire Credit Corporation
Note: The Litton Credit Service (owned by Goldman Sachs) and Saxon Mortgage (owned by Morgan Stanley) also signed an agreement with the regulator.
The engagement letter
OCC also released letters of engagement describing how independent consultants, maintained by servicers, will conduct file reviews and claims processes to identify borrowers who suffered financial injury as a result of the deficiencies identified in the OCC approval order.
Allegations of impropriety
There are allegations that the banks themselves have a heavy hand in the review process. News sources, citing e-mails, employee interviews and contracts, suggest that the biggest offenders - Bank of America, Wells Fargo, Citigroup and JPMorgan Chase - seem to do much of the review work themselves, sacrificing the independence of the review.
Yves Smith, in his financial blog Naked Capitalism, writes a comprehensive analysis of the Independent Foreclosure Review, interviews some former reviewers about the practices used by both Bank of America, and its contractor, Promontory Financial Group.
His findings show, in his words:
1. After extensive debriefing of Bank of America whistleblowers, we find strong evidence that banks often commit certain offenses, in some cases, pervasively, in servicing delinquent mortgages.
2. This settlement, as intended, is another significant bailout for predator services.
3. As we will show in the next post in this series, even making the most generous interpretation possible of the role played by Promontory, the Promontory review at Bank of America completely eliminates a significant category of borrower's danger that is explicitly discussed both in the consent order OCC and Promontory's engagement letter with Bank of America.
4. The design of the organization, the way the reviewers are managed, the deletion of the field of inquiry, and the record evidence that undermines the records of Bank of America all lead to a diverse program, if not properly designed, to ensure as much destructive information may not be considered or minimized.
Payment structure
The payment structure can be found on the Federal Reserve website http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20120621b2.pdf
References
Source of the article : Wikipedia
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