The next step in consent orders issued last year against the country’s biggest mortgage servicing firms is being taken by the Federal Reserve Board.
Fourteen of the largest servicing firms were hit with consent orders from federal banking regulators last April. The formal enforcement actions required the companies to improve their foreclosure and modification processes, hire outside firms to verify if any borrowers unjustly faced foreclosure and compensate victims.
The orders followed reviews conducted from November 2010 to January 2011that found unsafe and unsound processes and practices in residential loan servicing and foreclosure processing at several supervised institutions.
On Feb. 27, the Fed released action plans to correct deficiencies in residential mortgage loan servicing and foreclosure processing for Bank of America, Citigroup, EverBank, JPMorgan Chase, MetLife, PNC, SunTrust, US Bancorp and Wells Fargo. It also released engagement letters between the servicers and independent consultants that reviewed foreclosures processed between 2009 and 2010.
“The Federal Reserve will closely follow the implementation of action plans to ensure that the financial institutions correct deficiencies and evaluate any harm that was done to homeowners in the foreclosure process in 2009 and 2010,” last month’s Fed statement said.
On Thursday, action plans were released for HSBC North America Holdings Inc., Ally Financial Inc. and IMB HoldCo. LLC.
In addition, the Fed released the engagement letter between HSBC and it independent consultant.
“The Federal Reserve anticipates that more engagement letters and action plans will be released soon,” today’s statement said.
