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BY DARRELL BLOMBERG

Consent Orders

PRESS RELEASE

OCC Takes Enforcement Action Against Eight Servicers for Unsafe and Unsound Foreclosure Practices

http://www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47a.pdf

SUMMARY of FINDINGS

Interagency Review of Foreclosure Policies and Practices

(Federal Reserve System, Office of the Comptroller of the Currency, Office of Thrift Supervision)

http://www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47a.pdf

SERVICERS

Bank of America

www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47b.pdf

Citibank

www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47c.pdf

HSBC Bank

www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47d.pdf

JP Morgan Chase Bank, N.A.

www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47e.pdf

MetLife Bank, N.A.

www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47g.pdf

PNC Bank, N.A.

www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47i.pdf

U.S. Bank National Association, U.S. Bank National Association ND

www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47j.pdf

Wells Fargo Bank, N.A.

www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47k.pdf

DEFAULT MANAGEMENT SERVICE PROVIDERS

LPS; DocX, LLC; and LPD Default Solutions, Inc.

http://www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47f.pdf

MERSCORP, Inc. and the Mortgage Electronic Registration Systems, Inc.,

www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47h.pdf

INTER-AGENCY REVIEW

Intent:

“ensure safe and sound mortgage-servicing and foreclosure-processing business practices are implemented”

Scope:

“The reviews focused on issues related to foreclosure-processing functions.”

“The reviews did not include a complete analysis of the payment history of each loan prior to foreclosure or potential mortgage-servicing issues outside of the foreclosure process.”

Review:

Policies and procedures

Organizational structure and staffing

Management of third-party service providers

Quality control and internal audits

Compliance with applicable laws

Loss mitigation

Critical documents

Risk management

Findings:

“unsafe and unsound practices and violations of applicable federal and state law and requirements”

weaknesses in:

foreclosure governance processes

inadequate policies, procedures, and independent control

inadequate monitoring and controls over

external law firms

other third-party vendors

lack of sufficient audit trails for affidavits

(amount of indebtedness, fees, penalties, etc.)

not linked to internal records at the time the affidavits were executed

inadequate quality control and audit reviews

lack of compliance with

legal requirements

policies

procedures

maintenance of sound operating environments

inadequate identification of

financial risks

reputational risks

legal risks

organizational structure and availability of staffing

inadequate staffing to address the increased volumes of foreclosures

affidavit and notarization practices

documents not personally check for accuracy

signer did not possess

level of knowledge of the information they attested to

no oath was administered

failure to comply with state notary laws

excess fees charged

foreclosure document preparation processes

excess filing of lost note affidavits

third-party vendors & foreclosure attorneys

no oversight or monitoring by servicer

too many assumptions of compliance

CONSENT ORDER – ISSUES OF NON-COMPLIANCE

SERVICERS

(a) filed or caused to be filed in state and federal courts affidavits executed by its employees or employees of third-party service providers making various assertions, such as ownership of the mortgage note and mortgage, the amount of the principal and interest due, and the fees and expenses chargeable to the borrower, in which the affiant represented that the assertions in the affidavit were made based on personal knowledge or based on a review by the affiant of the relevant books and records, when, in many cases, they were not based on such personal knowledge or review of the relevant books and records;

(b) filed or caused to be filed in state and federal courts, or in local land records offices, numerous affidavits or other mortgage-related documents that were not properly notarized, including those not signed or affirmed in the presence of a notary;

*(c) litigated foreclosure proceedings and initiated non-judicial foreclosure proceedings without always ensuring that either the promissory note or the mortgage document were properly endorsed or assigned and, if necessary, in the possession of the appropriate party at the appropriate time;

*(d) failed to devote sufficient financial, staffing and managerial resources to ensure proper administration of its foreclosure processes;

(e) failed to devote to its foreclosure processes adequate oversight, internal controls, policies, and procedures, compliance risk management, internal audit, third party management, and training; and

(f) failed to sufficiently oversee outside counsel and other third-party providers handling foreclosure-related services

MERS and MERSCORP:

(a) have failed to exercise appropriate oversight, management supervision and corporate governance, and have failed to devote adequate financial, staffing, training, and legal resources to ensure proper administration and delivery of services to Examined Members; and

(b) have failed to establish and maintain adequate internal controls, policies, and procedures, compliance risk management, and internal audit and reporting requirements with respect to the administration and delivery of services to Examined Members.

LPS; DocX, LLC; and LPD Default Solutions, Inc.

(a) Executed numerous affidavits and similar sworn statements (collectively, “Affidavits”) making various assertions, such as the ownership of the mortgage note and mortgage (or deed of trust), the amount of principal and interest due, and the fees and expenses chargeable to the borrower, in which the affiant represented that the assertions in the Affidavit were made based on personal knowledge or based on a review by the affiant of the relevant books and records, when, in many cases, they were not based on such knowledge or review.  LPS executed these Affidavits on behalf of Examined Servicers knowing they would be filed in state courts and in connection with bankruptcy proceedings in federal courts;

(b) Executed assignments of mortgages containing inaccurate information pertaining to matters including the identity and location of the assignee and beneficiary and the effective date of the assignment. LPS recorded or caused to be recorded these assignments of mortgages in local land record offices, or executed them on behalf of Examined Servicers knowing they would be filed in state courts or in connection with bankruptcy proceedings in federal courts;

(c) Executed Affidavits, assignments of mortgages, and other mortgage-related documents (collectively, “Mortgage Documents”) on behalf of Examined Servicers without authority to execute the Mortgage Documents, specifically without having been duly appointed as an agent or officer of the Examined Servicers to execute documents on behalf of the Examined Servicers;

(d) Recorded or caused to be recorded in local land records offices numerous Mortgage Documents that were not properly notarized, including those not signed or affirmed in the presence of a notary, or knew that such Mortgage Documents would be filed in state and federal courts;

(e) Failed to respond in a sufficient and timely manner to the increased level of foreclosures by increasing financial, staffing, and managerial resources to ensure that LPS adequately handled the document execution services that LPS provided to Examined Servicers; and

(f) Failed to have adequate internal controls, policies and procedures, compliance, risk management, internal audit, and oversight of the document execution services that LPS provided to Examined Servicers

Filing an OCC Complaint

Check to make sure that your financial institution is a National Bank.

http://www.ffiec.gov/consumercenter/default.aspx

Filing a Bank Complaint – Overview

http://www.helpwithmybank.gov/complaints/index-file-a-bank-complaint.html

Online Customer Complaint Form

https://appsec.helpwithmybank.gov/olcc_form/

Print copy (pdf)

http://www.helpwithmybank.gov/complaints/form-pdf/Thrift%20Revisions%20Complaint%20Form%20Master%20revised%2007-25-11.pdf

Customer Assistance Group, 1-800-613-6743

Tags: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND
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