The following summary is an overview of the fourth set of compliance reports that I have filed with the United States District Court for the District of Columbia (the Court) as Monitor of the National Mortgage Settlement. The summary includes:
- An overview of the process through which my colleagues and I have reviewed the servicers’ performance on the Settlement’s servicing reforms
- An update on the servicers’ plans to correct issues outlined in this and prior reports
- Summaries of each servicer’s compliance for the first and second calendar quarters of 2014, including compliance with the four new additional metrics I issued in October 2013
- An analysis of complaints received from distressed borrowers and the professionals who represent them
I reported a total of three potential violations in the first two quarters of this year, the relevant test periods for this report. In the first quarter of 2014, Bank of America failed Metrics 7 and 19 and Citi failed Metric 20. There were no reported fails in the second quarter of 2014.
In May of 2014, I reported that Green Tree failed eight metrics in the fourth quarter of 2013 and had much work to do. I have since reviewed the corrective action plans Green Tree proposed to address the root causes of these fails and summarized them in this report. Green Tree reported, and I confirmed, that the servicer passed Metrics 10 and 12 in the second quarter of 2014, two of the metrics it previously failed. The six other previously failed metrics will be tested in subsequent test periods.
I filed with the Court an interim report on Ocwen’s progress for the relevant test periods. In May 2014, an Ocwen employee contacted a member of the Monitoring Committee and alleged serious deficiencies in the internal review group (IRG) process, which called into question the IRG’s independence and the integrity of the IRG’s operations. Based on these allegations, I launched an investigation into the claims. After my team and I reviewed numerous documents and interviewed several Ocwen personnel, I concluded that I could not rely on the work of Ocwen’s IRG for the first half of 2014. Therefore, I exercised my authority under the Settlement and tasked McGladrey, an independent accounting firm, to retest Ocwen’s performance on a number of metrics.
Additionally, after reviewing a letter issued by the New York Superintendent of Financial Services, which indicated that the date on certain correspondence from Ocwen to its consumers was incorrect, I directed Ocwen to scope, correct and remediate this letter dating problem. Again, I engaged McGladrey to perform additional work to confirm that Ocwen is complying with the Settlement. McGladrey’s work on both issues is ongoing, and I will report to the Court when it has been completed.