FEDERAL RESERVE,OCC AND 10 BANKS IN SETTLEMENT ON FORECLOSURES

(The following is a reformatted version of a joint press release
issued by the Board of Governors of the Federal Reserve System
and the Office of the Comptroller of the Currency. The release
was confirmed by the sender.) 
Joint Release                                              Board
of Governors of the Federal Reserve System
Office of the Comptroller of the Currency 
January 7, 2013 
Independent Foreclosure Review to Provide $3.3 Billion in
Payments, $5.2 Billion in Mortgage Assistance 
WASHINGTON-- Ten mortgage servicing companies subject to
enforcement actions for deficient practices in mortgage loan
servicing and foreclosure processing have reached an agreement
in principle with the Office of the Comptroller of the Currency
(OCC) and the Federal Reserve Board to pay more than $8.5
billion in cash payments and other assistance to help borrowers. 
The sum includes $3.3 billion in direct payments to eligible
borrowers and $5.2 billion in other assistance, such as loan
modifications and forgiveness of deficiency judgments.  The
payments involve mortgage servicers operating under enforcement
actions issued in April 2011 by the OCC, the Federal Reserve,
and the Office of Thrift Supervision.  The agreement ensures
that more than 3.8 million borrowers whose homes were in
foreclosure in 2009 and 2010 with the participating servicers
will receive cash compensation in a timely manner. 
Eligible borrowers are expected to receive compensation ranging
from hundreds of dollars up to $125,000, depending on the type
of possible servicer error. 
This agreement includes Aurora, Bank of America, Citibank,
JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S.
Bank, and Wells Fargo.  For these participating servicers,
fulfillment of the agreement would meet the requirements of the
enforcement actions that mandated that the servicers retain
independent consultants to conduct an Independent Foreclosure
Review. 
As a result of this agreement, the participating servicers would
cease the Independent Foreclosure Review, which involved case-by-case reviews, and replace it with a broader framework
allowing eligible borrowers to receive compensation
significantly more quickly.  The OCC and the Federal Reserve
accepted this agreement because 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.
Eligible borrowers will receive compensation whether or not they
filed a request for review form, and borrowers do not need to
take further action to be eligible for compensation. 
A payment agent will be appointed to administer payments to
borrowers on behalf of the servicers.  Eligible borrowers are
expected to be contacted by the payment agent by the end of
March with payment details.  Borrowers will not be required to
execute a waiver of any legal claims they may have against their
servicer as a condition for receiving payment.  In addition, the
servicers’ internal complaint process will remain available to
borrowers. 
The agencies continue to work to reach similar agreements in
principle with other servicers that are not parties to the
agreement announced today, but that are also subject to
enforcement actions for deficient practices in mortgage loan
servicing and foreclosure processing. 
OCC and Federal Reserve examiners are continuing to closely
monitor the servicers’ implementation of plans required by the
enforcement actions issued in April 2011 to correct the unsafe
and unsound mortgage servicing and foreclosure practices. 
Media Contacts:
Federal Reserve      Barbara Hagenbaugh      202-452-2955
OCC                     Bryan Hubbard     202-649-6870 
(bjh) NY 
#<873920.660640.3.3.0.0.76>#
 
 
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