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OCC's Walsh on Foreclosure Issues and MERS

By Anonymous

An update ... acting Comptroller of the Currency John Walsh commented on the mortgage servicer and MERS reviews today. There are two documents: written and oral testimony.

From the written testimony:

Following reports of irregularities in the foreclosure processes of several major mortgage servicers in the latter part of 2010, the OCC, together with the FRB, the FDIC, and the OTS, undertook an unprecedented project of coordinated horizontal examinations of foreclosure processing at the 14 largest federally regulated mortgage servicers during fourth quarter 2010. In addition, the agencies conducted interagency examinations of MERSCORP and its wholly owned subsidiary, Mortgage Electronic Registration Systems, Inc. (MERS), and Lender Processing Servicers (LPS), which provide significant services to support mortgage servicing and foreclosure processing across the industry. The primary objective of the examinations was to evaluate the adequacy of controls and governance over bank foreclosure processes, including compliance with applicable federal and state law. ...

There is a list of some of the objectives for uniform standards starting on page 16 of the written testimony.

From the oral testimony:

We are now finalizing remedial requirements and sanctions appropriate to remedy comprehensively the problems identified. Our actions will address identified deficiencies and will hold servicers to standards that require effective and proactive risk management, and appropriate remedies for customers who have been financially harmed. We are also discussing our supervisory actions with other Federal agencies and state Attorneys General with a view toward resolving comprehensively and finally the full range of legal claims arising from the mortgage crisis.

Equally important, we are drawing on lessons from these examinations to develop mortgage servicing standards for the entire industry. The OCC developed a framework of standards that we shared with other agencies, and we are now participating in an interagency process to establish nationwide requirements that are comprehensive, apply to all servicers, provide the same safeguards for all consumers, and are directly enforceable by the agencies. While we are still at a relatively early stage, we share the common objective to achieve significant reform in mortgage servicing practices.

It sounds like one of the clear goals of the servicer and MERS reviews is to resolve "comprehensively and finally the full range of legal claims arising from the mortgage crisis".

Full post as published by Calculated Risk on February 18, 2011 (boomark / email).