Alert August 06, 2013

FRB and OCC Amend Foreclosure-Related Consent Order Requiring Cash Payments

The FRB announced amendments to its prior enforcement action against a mortgage servicer for deficient practices in mortgage loan servicing and foreclosure processing. The amendments are similar to those announced in early 2013 with other mortgage servicers (see March 5, 2013 Alert) and will require the mortgage servicer to pay $230 million in cash payments to borrowers. The amendments will allow borrowers whose homes were in some stage of the foreclosure process with the mortgage servicer in 2009 and 2010 to receive compensation. Similar to the previous amended consent orders with other servicers, the mortgage servicer is expected to undertake loss mitigation efforts focused on foreclosure prevention. The amendments to the consent order replace requirements related to the Independent Foreclosure Review for the mortgage servicer.