The OCC Agrees to Halt the Independent Foreclosure Review Process

10 January 2013 Consumer Class Defense Counsel Blog

Did the OCC finally agree that the costs of the foreclosure look-back process overwhelmed its benefits, or was the government simply under-staffed and over-budgeted? It appears to be the financial world’s equivalent to the chicken or the egg question. Nonetheless, the OCC announced this week that it and the Federal Reserve had reached a deal with the ten mortgage servicing companies subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing.  Pursuant to the deal, the participating servicers are allowed to cease the Independent Foreclosure Reviews of individual foreclosure files, and replace the process with a “broader framework.” 

The OCC did not provide details about the agreed upon “broader framework,” other than advising that the deal requires the mortgage servicers to pay $3.3 billion in payments to eligible borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. Eligible borrowers will not need to take further action, and are not required to have previously filed a request for review. A payment agent will be appointed to administer the payments and to contact the eligible borrowers. The OCC’s press release claims that eligible borrowers are expected to receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of possible servicer error. Moreover, the borrowers are not required to waive any of their potential legal claims against their respective servicer in order to receive payment. 

The OCC defended its decision to accept the deal, stating it provides the greatest benefit to consumers subject to unsafe and unsound mortgage servicing and foreclosure practices during the relevant period in a more timely manner than would have occurred under the review process. The OCC further explained that the agreement ensures that more than 3.8 millions borrowers whose homes were in foreclosure in 2009 and 2010 with the participating servicers will receive cash compensation in a timely manner. 

From a broader perspective, this deal provides the benefit of allowing the borrowers and servicers to move on and focus on the future—a future that will hopefully be more positive for both the servicers and the borrowers.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services

Insights

A Review of Recent Whistleblower Developments
19 July 2019
Legal News: Whistleblower Developments
Cloud security inadequate for Cyber threats, are you surprised?
19 July 2019
Internet, IT & e-Discovery Blog
Blockchain: A Tool With a Future in Healthcare
18 July 2019
Health Care Law Today
Do You Know What IMMEX Stands For?
16 July 2019
Dashboard Insights
Review of 2020 Medicare Changes for Telehealth
11 December 2019
Member Call
2019 NDI Executive Exchange
14-15 November 2019
Chicago, IL
MAGI’s Clinical Research Conference
29 October 2019
Las Vegas, NV
Association for Corporate Counsel Annual Meeting 2019
27-30 October 2019
Phoenix, AZ