OCC Terminates Orders Against Three Mortgage Servicers, Imposes Restrictions on Six Others – NMP Skip to main content

OCC Terminates Orders Against Three Mortgage Servicers, Imposes Restrictions on Six Others

Jun 18, 2015

The Office of the Comptroller of the Currency (OCC) has announced that it will escheat at the end of 2015 any remaining uncashed payments made pursuant to the Independent Foreclosure Review (IFR) Payment Agreement so eligible borrowers and their heirs may claim the funds through their states’ escheatment processes. The agency also terminated foreclosure-related consent orders against three national bank mortgage servicers that have met the consent order requirements, and imposed business restrictions on six banks that have not completed the required corrective actions.

To date, the IFR Payment Agreement resulted in the distribution of more than $2.7 billion to more than 3.2 million eligible borrowers from OCC-supervised institutions. This amount represents more than 90 percent of the total amount available for distribution. Despite that high cash rate compared to many other payment distributions, the OCC anticipates that approximately $280 million from OCC-supervised institutions will remain unclaimed at the end of the year after considerable efforts to locate eligible borrowers have been exhausted. The decision to escheat all funds available from uncashed checks provides the remaining eligible borrowers and their heirs the additional opportunity to claim the funds through their states’ escheatment claims processes. The OCC’s decision only affects funds attributable to the orders issued to institutions it regulates.

The decision to escheat uncashed payments was included in the termination documents and amended consent orders released today.

The OCC terminated orders against Bank of America,  Citibank, and PNC Bank because it determined that these institutions have complied with the orders issued in April 2011 and amendments issued in February 2013.

The OCC also has determined that EverBank, HSBC Bank USA, JPMorgan Chase Bank, Santander Bank, U.S. Bank National Association and Wells Fargo Bank have not met all of the requirements of the consent orders. As a result, the amended orders issued today to these banks restrict certain business activities that they conduct. The restrictions include limitations on:

►The acquisition of residential mortgage servicing or residential mortgage servicing rights (does not apply to servicing associated with new originations or refinancings by the banks or contracts for new originations by the banks);
►New contracts for the bank to perform residential mortgage servicing for other parties;
►Outsourcing or sub-servicing of new residential mortgage servicing activities to other parties;
►Off-shoring new residential mortgage servicing activities; and
►New appointments of senior officers responsible for residential mortgage servicing or residential mortgage servicing risk management and compliance.

These restrictions vary based on the particular circumstance of each bank.

In all cases, OCC examiners will continue to oversee these institutions’ corrective actions and mortgage servicing activities as part of the agency’s ongoing supervision.

Foreclosure-related consent orders against Aurora Bank and MetLife Bank were terminated previously by operation of law after these institutions ceased to operate as regulated, insured depository institutions. Separately, OneWest Bank completed the IFR and remediation to borrowers as required under its original order issued in April 2011 and did not enter into a payment agreement with federal regulators. Final determination of OneWest Bank’s compliance with the corrective actions required in its April 2011 order is being considered in conjunction with its application to merge with CIT Bank, and separately from other banks that entered into IFR payment agreements in 2013.

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Jun 18, 2015
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