OCC REVIEW PROCESS UNDERWAY: MANDELMAN OFFERS OPINION AND FACTS

MOST POPULAR ARTICLES

GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

NOTE: CHECK WITH LICENSED LAWYER BEFORE YOU DO OR DON’T DO ANYTHING.

by Mandelman

See entire article at MANDELMAN ON OCC AUDIT OR REVIEW

Requirements and Guidelines for Homeowners filing a Request for Review…

Okay, so here are some of the things you need to know before you get started filing your “Request for Review” form with the OCC, in order to be considered as part of their Independent Foreclosure Review process.

• You have to have been part of a “foreclosure action” on your PRIMARY RESIDENCE between January 1, 2009 and December 31, 2010.

• What is a “foreclosure action?”  It’s one of the following four situations:

• You lost your home to foreclosure, and its been sold by the trustee.
• You were in foreclosure, but either because you brought the payments current, entered some sort of payment/forbearance plan, applied for a loan modification, or filed bankruptcy, it was pulled out of foreclosure.
• You were in foreclosure, but were able to sell the home via short sale, or chose to deed-in-lieu to avoid actually losing home to foreclosure.
• You’re in foreclosure now and you’re still delinquent, but no foreclosure sale has happened yet.

• Here’s the list of participating servicers:

• America’s Servicing Co.
• Aurora Loan Services
• Bank of America
• Beneficial
• Chase
• Citibank
• CitiFinancial
• CitiMortgage
• Countrywide
• EMC
• EverBank/EverHome Mortgage Company
• GMAC Mortgage
• HFC
• HSBC
• IndyMac Mortgage Services
• MetLife Bank
• National City Mortgage
• PNC Mortgage
• Sovereign Bank
• SunTrust Mortgage
• U.S. Bank
• Wachovia Mortgage
• Washington Mutual (WaMu)
• Wells Fargo Bank, N.A.

Examples of financial injury…

The OCC lists examples of financial injury as a result of “errors, misrepresentations, or other deficiencies in the foreclosure process,” but they also state clearly that IT IS BY NO MEANS MEANT TO BE A COMPLETE LIST.  It’s really more like general guidance or a starter list of examples than anything else.

Also, it seems clear that the OCC only put things on this list that were fairly shallow or easy to come up with… things like dual tracking, which is when a servicer forecloses on a borrower while that borrower is in the middle of applying for a modification or making trial payments… along with accounting discrepancies, or violations of the Servicemembers Civil Relief Act.

It makes sense, if you think about it.  After all the OCC isn’t really here to help homeowners prevail… they’re only facilitating the independent review process.   It’s up to the homeowners who file to present their cases properly.

So, in point of fact, there could exist any number of other “errors, misrepresentations, or other deficiencies in the foreclosure process,” that could have caused homeowners to be financially damaged.

Here’s what’s on the OCC’s list…

• The mortgage balance amount at the time of the foreclosure action was more than you actually owed.

This one is kind of weird, in my mind, because I’m not sure how homeowners will know if this was the case, but if you do think this was the case then you obviously have the information… well, fair enough.

• You were doing everything the modification agreement required, but the foreclosure sale still happened.

This should be on the Servicer’s Greatest Hits CD, if they ever do one… it’s the hit single, “Dual Tracking.”  If you were foreclosed on while making your trial payments, this one’s for you.

• The foreclosure action occurred while you were protected by bankruptcy.

Also very straightforward… if this happened to you, you’re on.

• You requested a modification, submitted complete documents on time, and were waiting for a decision when the foreclosure sale occurred.

More dual tracking, and this happened to many, many people.

• Fees charged or mortgage payments were inaccurately calculated, processed, or applied.

If you have evidence of this, it’s really a yes or no sort of thing.

• The foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended and the servicemember did not waive his/her rights under the Servicemembers Civil Relief Act.

Again, very straight forward… and you know if it applies to you.

A few words about financial injury…

Okay, everyone who reads me knows that I’m definitely NOT A LAWYER… I mean… you’re reading this right now.  Does it read like a lawyer wrote it?  Exactly.  And, thank you for saying so.

But, I do know what sometimes seems like about a zillion of them and I pay attention.  And I can read like the dickens.  I’m not kidding, ask my parents, they’ll tell you.  So, listen to what I’m going to tell you here… it’s about financial injury or in other words, “damages.”

Determining how you were damaged or financially injured is not going to be nearly as easy as you might think.  It’s not “Common Sense Court,” we’re talking about here… we’re talking about lawyers at the OCC… banking lawyers… the worst kind.

The idea is that damages are supposed to measure in monetary terms, the extent of the harm that a plaintiff (as in, you the homeowner) has suffered because of a defendant’s (as in, your servicer’s) actions, and their purpose is to restore the injured party to the position they were in before the harm happened.

In general, you should think about damages as being restoring what you lost… as opposed to being punitive, because although punitive damages may be awarded in certain situations, this is not one of them.  In fact, remember… this isn’t like you’re going to court… you’ll be submitting your Request for Review to the OCC.

There are three basic categories of damages.  The first is termed compensatory damages, which are awarded to restore what the plaintiff lost as a result of the defendant’s wrongful conduct.  Next, there are nominal damages… a small sum awarded when someone has not suffered any substantial loss, but has been wronged nonetheless.  And then there are punitive damages, which are awarded under certain circumstances to punish a defendant for particularly egregious, wrongful conduct.

But, for the purposes of filing your Request for Review with the OCC, you need to think about how your servicer’s acts directly caused you harm… and by harm, I mean financial harm.

Whenever the topic of “damages” comes up, I often hear homeowners mention the idea of mental pain and suffering.  Now, there’s no question that this type of suffering is involved here, as it includes fright, nervousness, grief, emotional trauma, anxiety, humiliation, and indignity… and I think it’s safe to say that homeowners in foreclosures have all those things, and probably a few more.

On the Website, Law.com, they talk about “emotional distress damages,” as follows:

Evidentiary problems include the fact that such distress is easily feigned or exaggerated, and professional testimony by a therapist or psychiatrist may be required to validate the existence and depth of the distress and place a dollar value upon it.

But, you have to remember, we’re not talking about a court of law here, we’re talking about the OCC, so you need to concentrate primarily on how you were damaged tangibly, like in dollars and sense, which may be hard to do when the home you lost to foreclosure, or may lose to foreclosure, has no equity.

You see, as far as damages for losses to real property goes, it looks to me like they could measure financial injury related to real property by assessing the difference in the fair market value of the property before and after the injury.  Not only that, but it also seems that diminished fair market value is not used as the measure of recovery, if the financial injury to real property is temporary in nature.

Now, I have no idea whether any of this makes any difference to the OCC, but I do know this: damages or financial injuries are subject to numerous limitations and legal definitions, so it seems to me that most people are going to need a lawyer to help them figure “financially injury” component out.

I’m not saying that it’s an insurmountable issue, but since the OCC has not provided any real guidance in this area, and since the OCC’s process does not offer any sort of appeals process should you be denied, you probably want to at least consult with an experienced attorney before filing.

All hung up on titles…

Within the OCC’s consent orders, which you’ll find links to below, are listed the “bad acts” of which the respective mortgage servicers stand accused, and by reading through them you’ll find many of the things that have made the news this past year having to do with improper foreclosures, including “robo-signing (although it’s not called “robo-signing in the consent orders, it’s called something like “unauthorized signing of affidavits, or something close), improper notarization, dual tracking, and a whole host of other things that fall under the umbrella of “unsafe and unsound banking practices.”

The general idea is to find out which things appear on your servicer’s consent decree, and match up the things that happened to you, and how you were damaged by those things.  And it may be that in order to do that, you’ll need to look at your Chain of Title documents.

I’m looking into this issue to find out exactly what you’ll need, if anything, so as I said just stand by… like I said in the beginning, there’s nothing gained by rushing.

In Conclusion…

The OCC says that, as it relates to borrowers, it’s driving this Independent Foreclosure Process for the following reasons:

• Weaknesses in foreclosure processes and controls present the risk of foreclosing with inaccurate documentation, or foreclosing when another intervening circumstance should intercede.
• Even if a foreclosure action can be completed properly, deficiencies can result (and have resulted) in violations of state foreclosure laws designed to protect consumers.
• Such weaknesses may also result in inaccurate fees and charges assessed against the borrower or property, which may make it more difficult for borrowers to bring their loans current.
• In addition, borrowers can find their loss-mitigation options curtailed because of dual-track processes that result in foreclosures even when a borrower has been approved for a loan modification.
• The risks presented by weaknesses in foreclosure processes are more acute when those processes are aimed at speed and quantity instead of quality and accuracy.

Here are links to the various OCC Consent Orders, but check with the OCC if yours isn’t on this list, as it may not have been updated.

• Consent Order for Aurora Bank, FSB (PDF)
• Consent Order for Bank of America (PDF)
• Consent Order for Citibank (PDF)
• Consent Orders for EverBank and EverBank Financial Corp. (PDF)
• Consent Order for HSBC Bank (PDF)
• Consent Order for JPMorgan Chase Bank, N.A. (PDF)
• Consent Order for LPS; DocX, LLC; and LPD Default Solutions, Inc. (PDF)
• Consent Order for MetLife Bank, N.A. (PDF)
• Consent Order for MERSCORP and Mortgage Electronic Registration Systems, Inc. (MERS) (PDF)
• Consent Orders for OneWest Bank, FSB and IMB HoldCo LLC (PDF)
• Consent Order for PNC Bank, N.A. (PDF)
• Consent Order for Sovereign Bank (PDF)
• Consent Order for U.S. Bank National Association, U.S. Bank National Association ND (PDF)
• Consent Order for Wells Fargo Bank, N.A. (PDF)

Homeowners can also visit www.IndependentForeclosureReview.com for more information, and the OCC says that assistance with forms and answers to questions about the process are available at 1-888-952-9105, Monday through Friday from 8 a.m. to 10 p.m. (ET) and on Saturday from 8 a.m. to 5 p.m. (ET).  And here’s a link to the FAQ about the new review process.

To be entirely candid, they don’t really have much information… they can answer 49 questions, but after that, forget it.  I wasn’t surprised though, the whole thing is new, and I’ve never learned much of anything by calling a government phone number.

So, stay tuned… I’m going to be providing a lot more information on what you need to know and do related to filing a Request for Review to the OCC as part of the Independent Foreclosure process in the days and weeks to come.  I’ll even be offering a Webinar for those looking to drill down deeper into how to package your complaint.

So, hang on… don’t buy anything from anyone you don’t know… it’s still early, and much too early to get scammed into buying some hokey report or forensic loan audit… those things are giant scams for the most part… and you don’t need them to file your OCC complaint.  Whatever tools you do need, I’ll find them and make available.

And, please… be careful out there…

Tags: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, OCC AUDIT, OCC REVIEW, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND
Posted in bubble, Corruption, Eviction, securities fraud |