The Office of the Comptroller of the Currency is the Federal agency responsible for the regulation and supervision of nationally registered financial institutions as well as national branches of international banks.1 As such, it was the regulatory agency most directly responsible for oversight (or lack of) of the largest mortgage lending and servicing companies and related financial agencies involved in the ongoing modification and foreclosure crisis. In late 2010, investigations by the OCC and other state and Federal agencies revealed numerous “unsafe and unsound” practices in the handling of home mortgage modifications and foreclosures. In the spring of 2011, the OCC instituted enforcement actions against 14 of these companies in the form of Consent Orders.2 In the most part, these orders essentially directed the companies to cease and desist these practices with the parties agreement without acknowledging guilt.
One of the key features of these orders was the establishment of Independent Foreclosure Review board by each company to determine if home owners in foreclosure in 2009 and 2010 of their occupied, primary residence had suffered damages from these practices and might be entitled to some type of compensation. All potential claimants were to be notified by mail or publication of their option to file for an Independent Foreclosure Review by the consultant firms hired by the mortgage firms. Homeowners needed to fill out and returns the mailed forms or forms available on the website 3 in order to request a review. The boards would then review the request for qualification and if deemed appropriate, subsequent review. The deadline for applying for this review has been extended several times with the most recent extension setting the deadline as September 30.
The OCC recently released an update on the program’s progress so far4 and a remediation framework to be used as the basis for remediation and compensation for victims of the proscribed practices 5. Although over 4 million households were sent notices, fewer than 194,000 requested review. The consultants have selected another about 145 thousand additional files for review. Overall, less than 9% of possible claimants are being reviewed for relief. Although the guidelines recommend only a thousand dollars or more in compensation for some errors and injuries, compensation for other actions include “rescind foreclosure where possible” and “If recission is not possible; pay $125,000 plus equity, …”
In summation, eligible households who have not applied for whatever reason may wish to reconsider. “You don’t ask, you don’t get”.6
- Lenore Reinhard, mother-in-law, daily