The Office of the Comptroller of the Currency (OCC) issued a report today regarding 12  mortgage servicers' compliance with consent orders issued last April 2011. These orders were meant to correct deficient and unsound foreclosure practices.

The report, which is titled Interim Status Report: Foreclosure-Related Consent Orders, summarized progress on activities related to the independent foreclosure review announced Nov. 1. 

The OCC's paper also includes other activities to enhance mortgage servicing operations, strengthen oversight of third-party service providers and activities related to the Mortgage Electronic Registration Systems (MERS), improve management information systems, assess and manage risk, and ensure compliance with applicable laws and regulations.

Although most of the work — to correct identified weaknesses in policies, operating procedures, control functions, and audit processes — will almost be complete in the first part of next year, other longer-term initiatives will continue through the end of 2012.

Aside from the interim report, the OCC also released the engagement letters that describe how the independent consultants, which are retained by the 12 servicers, will conduct their file reviews and claims processes. These processes are meant to identify the borrowers who suffered financial injury resulting from the deficiencies listed in the OCC’s consent orders.

The letters also identify the names of the independent consultants that are conducting the reviews and include language stipulating that consultants would take direction from the OCC throughout these reviews.

The language of the letters also stops servicers from overseeing, directing, or supervising any of the reviews.

Limited proprietary and personal data has been redacted, the OCC said. The review process being implemented at some firms might actually be different from that described in the engagement letters given some coordination with the OCC to ensure a consistent process among the servicers.

In the a related development, the OCC also published the engagement letters submitted by the independent consultants that were retained by servicers regulated by the OCC. These independent firms will be conducting foreclosure reviews pursuant to the requirements of the April 13 consent orders.

The engagement letters showed how the independent consultants will be conducting their file reviews and claims processes to find out which borrowers suffered financial injury because of servicer deficiencies identified in the OCC’s consent orders.

Here is a list of the 12 servicers with their respective independent consultants:

Aurora Bank: Allonhill
Bank of America
: Promontory Financial Group
: PricewaterhouseCoopers
: Clayton Services
: Ernst & Young
JPMorgan Chase
: Deloitte & Touche
MetLife Bank
: Ernst & Young
OneWest: Navigant Consulting
PNC: Promontory Financial Group
: Treliant Risk Advisors
US Bank: PricewaterhouseCoopers
Wells Fargo: Promontory Financial Group


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