Independent Foreclosure Review 2014 - The Fed - Home

Independent Foreclosure Review

July 2014

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

Independent Foreclosure Review

July 2014

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

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Contents

Executive Summary ................................................................................................................. 1

Enforcement Actions against Major Residential Mortgage Servicers .............................................. 1 Corrective Actions to Address Deficiencies .................................................................................. 2 Actions to Identify and Remediate Potentially Harmed Borrowers .................................................. 3

Background on the Independent Foreclosure Review (IFR) .................................... 5

Consent Order Requirements ...................................................................................................... 5 Selection of Independent Consultants .......................................................................................... 5 IFR Methodology ........................................................................................................................ 6 Financial Injury Guidance ............................................................................................................ 8 Regulatory Oversight of Independent Consultants' Reviews .......................................................... 8 Independent Consultants' Processes for Reviewing Foreclosure Files ............................................ 9 Preliminary Findings of the IFR .................................................................................................... 9 IFR Costs ................................................................................................................................. 11

Transition from the IFR to the Payment Agreement ................................................. 13

Rationale .................................................................................................................................. 13 Independent Consultant Feedback ............................................................................................ 14

Payment Agreement Implementation .............................................................................. 17

Cash Payments to Borrowers .................................................................................................... 17 Foreclosure Prevention Assistance ............................................................................................. 20

Ongoing Supervision ............................................................................................................. 23

Supervisory Response to Issues Identified in the IFR .................................................................. 23 Ongoing Supervision of Corrective Actions Required by Consent Orders ..................................... 23

Conclusion ................................................................................................................................ 25 Appendix ................................................................................................................................... 27

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