The OCC and the FRB announced amendments to their prior enforcement actions against mortgage servicers for deficient practices in mortgage loan servicing and foreclosure processing. The amendments memorialize agreements in principle with several large banks announced in January (see January 10, 2013 Alert) and will require the servicers to pay $3.6 billion in cash and $5.7 billion in other assistance to borrowers (e.g., loan modifications and forgiveness of deficiency judgments). The amendments will allow borrowers whose homes were in some stage of the foreclosure process in 2009 and 2010 and serviced by one of the banks subject to the amended consent orders to receive cash payments and other assistance. The mortgage servicers are expected to undertake loss mitigation efforts focused on foreclosure prevention and both OCC and FRB examiners will continue to monitor the servicers’ implementation of corrective actions required by the original enforcement actions. The amendments replace requirements related to the Independent Foreclosure Review for the mortgage servicers. For servicers that did not enter agreements with the OCC and FRB, the Independent Foreclosure Review process will continue.
Alert March 05, 2013