Tuesday, April 9, 2013

FRB: Independent Foreclosure Review

FRB: Independent Foreclosure Review

What You Need to Know: Independent Foreclosure Review

Important Update: Borrower Information Postcards Mailed

On March 18, 2013, more than 4.2 million people were sent postcard notices about payments they will receive as a result of an agreement between federal banking regulators and 13 mortgage servicers. For more information, please call 1-888-952-9105, which is the number for Rust Consulting--the Paying Agent--that is printed on each postcard.
Watch out for scams. Beware of anyone who asks you to call a different phone number than the number above or to pay a fee to receive a payment under the agreement.
For borrowers with mortgage loans with the following servicers: Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo,1  see: Payment Agreement.
For borrowers with mortgage loans with the following servicers: EverBank/EverHome Mortgage Company, Financial Freedom (OneWest), GMAC Mortgage, and IndyMac Mortgage Services (OneWest), the Independent Foreclosure Review process continues.


The Federal Reserve Board issued enforcement actions against four large mortgage servicers
--GMAC Mortgage, HSBC Finance Corporation, SunTrust Mortgage, and EMC Mortgage Corporation--in April 2011. Under those actions, the four servicers were required to retain independent consultants to review foreclosures that were initiated, pending, or completed during 2009 or 2010. The review was intended to determine if borrowers suffered financial harm directly resulting from errors, misrepresentations, or other deficiencies that may have occurred during the foreclosure process.

A number of servicers supervised by the Office of the Comptroller of the Currency (OCC) were also required to conduct independent reviews. (See below for the full list of servicers.)
The deadline to request an independent review was December 31, 2012.

Eligibility for Independent Foreclosure Review

Borrowers were eligible for an independent foreclosure review if they met the following criteria:
  • the property securing the loan was the borrower's primary residence;
  • the mortgage was in the foreclosure process (initiated, pending, or completed) at any time between January 1, 2009, and December 31, 2010; and  
  • the mortgage was serviced by one of the following mortgage servicers:
America's Servicing Company* Countrywide* National City Mortgage*
Aurora Loan Services* EMC Mortgage Corporation* PNC Mortgage*
BAC Home Loans Servicing* EverBank/EverHome Mortgage Company Sovereign Bank*
Bank of America* Financial Freedom (OneWest) SunTrust Mortgage*
Beneficial* GMAC Mortgage U.S. Bank*
Chase* HFC* Wachovia Mortgage*
Citibank* HSBC* Washington Mutual (WaMu)*
CitiFinancial* IndyMac Mortgage Services (OneWest) Wells Fargo Bank, N.A.*
CitiMortgage* MetLife Bank* Wilshire Credit Corporation*
*These companies are participating in the Payment Agreement.
Eligible borrowers were sent a Request for Review form by mail starting in November of 2011 when the program launched.
If a borrower previously filed a complaint with these servicers about foreclosures pending during the review period, they were still eligible to file for an independent review of their foreclosure.
There were no costs associated with being included in the review; the review was a free program. Borrowers should beware of anyone requiring payments for assistance in connection with the Independent Foreclosure Review or any other foreclosure assistance program.

Federal Reserve's Role

The Federal Reserve's role is to ensure compliance with the enforcement actions issued in April 2011, including the payment process under the agreement in principle announced in January of 2013.
OCC and Federal Reserve examiners are continuing to closely monitor the servicers' implementation of plans required by the enforcement actions issued in April 2011 to correct the unsafe and unsound mortgage servicing and foreclosure practices.

1. Although not part of the Independent Foreclosure Review, on January 16, 2013, Goldman Sachs (Litton Loan Servicing LP) and Morgan Stanley (Saxon Mortgage Services, Inc.) reached similar agreements in principle with the Federal Reserve to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing. With the addition of Goldman Sachs (Litton Loan Servicing LP) and Morgan Stanley (Saxon Mortgage Services, Inc.), nearly 4.2 million borrowers will receive a total of $3.6 billion in cash compensation while an additional $5.7 billion will be provided by the thirteen servicers for mortgage assistance. Return to text

Related Links

February 28, 2013
Press Release 
January 18, 2013
January 16, 2013
January 7, 2013
Press Release
August 2, 2012
Press Release
June 21, 2012
Press Release
March 8, 2012
Press Release
February 27, 2012
Press Release
February 15, 2012
Press Release
November 1, 2011
April, 2011
June 21, 2012

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