Seems like every day there is a new lawsuit alleging lender misconduct as well as a new settlement. The Office of the Comptroller of the Currency (OCC) has done it again. Recently the OCC has questioned EverBank Financial for mismanaging foreclosures and the foreclosure review process. This new round of accusations is the result of a previous OCC agreement with the lender and 15 other larger lenders. This agreement led many servicing agents to agree to and then abandon an independent foreclosure review process. EverBank opted not to abandon a mortgage and foreclosure review process when many other lenders did. As a result of a recent OCC review, Everbank now has agreed to provide “about $37 million in cash payments” to mortgage borrowers whose homes were “in any state of foreclosure from 2009 to 2010” and additional payouts to housing advocacy groups. OCC regulators have been working for quite some time on “encouraging” EverBank to abandon its tedious, file-by-file foreclosure and mortgage review process.
Now that EverBank has agreed to abandon the individual evaluations, OneWest Bank is the only lender still conducting foreclosure reviews on a case-by-case basis. One West servicing has been sold to Ocwen so perhaps this is no longer an issue. Previously, lenders have sent about $2.7 billion in checks to more than three million borrowers since the OCC settlement. This does not include the aforementioned Evergreen settlement. Many of these checks were for amounts as low as $300.
When distressed homes became an issue, my opinion is that the OCC did very little. Letters and complaints to them resulted in little action or results. However, this seems to have dramatically changed recently. In the past, I did not recommend working with the OCC on a distressed property, but now I do. They do not have as much authority as some would opine, but when they can intervene, it is a useful tool at this point.
Paddy Deighan J.D. Ph.D
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