WASHINGTON (TheStreet) -- The Office of the Comptroller of the Currency said on Tuesday that the nation's largest mortgage servicers would "complete much of the work" required to clean up their loan servicing and foreclosure practices by early next year.
The OCC slapped the largest U.S. mortgage loan servicers, including Bank of America (BAC), Citigroup (C) subsidiary Citibank, HSBC (HBC), JPMorgan Chase (JPM), MetLife (MET) unit MetLife Bank, PNC (PNC), U.S. Bancorp (USB) subsidiary U.S. Bank, and Wells Fargo (WFC), with cease and desist orders in April, requiring the group to hire independent consultants to "conduct a multi-faceted independent review of foreclosure activities in 2009 and 2010," and "to correct deficient and unsafe or unsound practices in their mortgage servicing activities," along with beefing-up their oversight of third-party service providers, and their activities related to Mortgage Electronic Registration Systems, or MERS.
The regulator said that, as required, all the servicers had submitted "independent consultant engagement letters and servicer action plans" in July, and that the "OCC closely evaluated and approved consultants to prevent conflicts of interest."
The agency said work was "well under way on the actions necessary to comply with the consent orders," and that efforts "to correct deficiencies in foreclosure processes, management oversight, and internal audit [were] furthest advanced."In Bank of America's updated engagement letter from Sept. 6, Promontory Financial Group said it would "conduct an independent review of certain residential foreclosure actions regarding individual borrowers with respect to BAC's mortgage servicing portfolio," including Bank of America's foreclosure actions as a lender, servicer, within 423 days. Promontory Financial Group is also conducting the servicing and foreclosure audits for PNC and Wells Fargo. Other independent consultants include Deloitte & Touche for JPMorgan, Ernst & Young, for HSBC and MetLife Bank, and PricewaterhouseCoopers, for Citibank and U.S. Bank. The OCC said that on Nov. 1, "an integrated claims processor began mailing letters to borrowers who were in any stage of foreclosure on their primary residences between January 1, 2009 and December 31, 2010," describing the process "borrowers should follow for requesting reviews of their cases if they believed they suffered financial injury as a result of servicer errors, misrepresentations, or deficiencies in the foreclosure process." The reviews of borrower petitions are expected to take several months.
Philip van Doorn. To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.
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