Alert January 10, 2013

Federal Banking Regulators Announced Settlement in Independent Foreclosure Review

The Office of the Comptroller of the Currency and the Federal Reserve Board announced that they have reached an agreement in principle with ten mortgage servicing companies that are currently subject to enforcement actions for mortgage loan servicing and foreclosure practices.  The mortgage servicing companies have agreed to provide $3.3 billion in direct payments to consumers harmed by the servicers’ practices and $5.2 billion in other relief (e.g., deficiency judgment forgiveness and loan modifications). The settlement is in response to complaints by both industry and consumer groups that the Independent Foreclosure Review was costly and was not providing relief to consumers.