Home > News & Events > 2014 Banking and Consumer Regulatory Policy
Between April 2011 and April 2012, the Office of the Comptroller of the Currency (OCC) and the Federal Reserve issued enforcement actions against 16 mortgage loan servicers for deficient practices in mortgage loan servicing and foreclosure processing. In addition to correcting their servicing practices, the actions required the servicers to hire independent consultants to conduct file reviews to determine if borrowers suffered financial injury and were eligible for financial remediation.
To settle their obligations under the IFR, 15 mortgage servicers entered into the Payment Agreement with the OCC and the Federal Reserve to provide $3.9 billion in direct cash payments to borrowers and approximately $6.1 billion in foreclosure prevention assistance. The Payment Agreement provides the greatest benefit to consumers in a timelier manner than would have occurred under the IFR and ensures that servicers cannot ask or require borrowers to waive any legal claims against their servicer as a condition of payment.
The report released today provides information on the process for the review of the foreclosure files during the IFR and file review results, including servicer error rates during the IFR, up to the time the IFR was replaced. The report also contains updated information on direct borrower payments and other assistance from the Payment Agreement and discusses the Federal Reserve's ongoing supervision of corrective actions the mortgage servicers are required to implement. The report focuses primarily on servicers regulated by the Federal Reserve.