(Updated with a statement from Green Tree’s parent company, Walter Investment)
The five servicers that were part of the National Mortgage Settlement may have fulfilled their consumer relief obligations in March, but the companies are still required to comply with the settlement’s servicing rules.
The mortgage servicing activities of Bank of America(BAC), JPMorgan Chase (JPM), Citigroup (C), Wells Fargo(WFC), and Ocwen Financial (OCN) and Green Tree Servicing (the two companies that purchased servicing rights from ResCap after the company was reorganized through bankruptcy), are still monitored by the Office of Mortgage Settlement Oversight.
On Wednesday, the monitor of the NMS released the results of its third- and fourth-quarter compliance reports for the six companies that are now under its oversight.
According to the compliance testing results, Bank of America, Chase, Citi, Ocwen and Wells Fargo passed all 29 of the settlement’s required metrics for servicing.
The news wasn’t as good for Green Tree, which failed eight of the tests.
“After extensive testing, I can confirm that Green Tree failed eight metrics,” said Joseph Smith, monitor of the NMS. “These results show that Green Tree must make significant changes to improve its practices and comply with the Settlement.”
Green Tree implemented the settlement’s servicing standards after it acquired approximately 18.5% of the ResCap servicing rights. The NMS compliance testing took place during the fourth quarter of 2013.
According to the report from the monitor, Green Tree failed the following servicing metrics:
Metric 4, which tests whether the servicer accurately stated amounts due from borrowers in proofs of claims filed in bankruptcy proceedings
Metric 5, which tests whether the servicer accurately stated amounts due from borrowers in affidavits filed in support for relief from stay in bankruptcy proceedings
Metric 6, which tests whether loans were delinquent at the time foreclosure was initiated and whether the servicer provided borrower with accurate information in a pre-foreclosure letter
Metric 7, which tests whether the servicer provided borrower with required notifications no later than 14 days prior to referral to foreclosure and whether required notification statements were accurate
Metric 10, which tests whether the servicer waived post-petition fees, charges or expenses when required by the Settlement
Metric 12, which tests whether the servicer has documented policies and procedures in place to oversee third party vendors
Metric 18, which tests whether the servicer responded to government submitted complaints and inquiries from borrowers within 10 business days and provided an update within 30 days
Metric 19, which tests whether the servicer notified the borrower of any missing documents in a loan modification application within five days of receipt