Econintersect: A report released Wednesday by the Office of the Comptroller of the Currency (OCC) is a status report on the Independent Foreclosure Review (IFR) program. This ongoing review has uncovered massive misconduct by banks in the process of executing the IFR resulting in improper denial of loan modification requests and charging of improper fees. As a result foreclosures proceeded which could have been prevented.
The file review process was suspended in January 2013 when the banks agreed to make general settlements totaling nearly $10 billion to a broad class of mortgage holders subjected to foreclosures without completing the review to identify the specific mortgage holders who had suffered damages. The partially completed review discovered a wide range of errors across the banks being audited. JP Morgan Chase, U.S. Bank, Citibank and HSBC had low error rates in handling mortgage modifications to mitigate circumstances contributing to the foreclosure. Wells Fargo, Bank of America, Aurora and PNC Bank had the highest error rates. In some cases more than 20% of cases were mishandled. The data summary is shown in the following table:
Click on title page image below to read the complete OCC report (pdf):
- Report Highlights Status of Independent Foreclosure Review Payment Agreement (Press Release, Office of the Comptroller of the Currency, 30 April 2014)
- Foreclosure-Related Consent Orders Status Report: Observations, Payments, and Foreclosure Prevention Assistance (Office of the Comptroller of the Currency, April 2014)
- Big Banks Erred Widely on Troubled Mortgages, U.S. Regulator Confirms (Michael Corkery, The New York Times, 30 April 2014)
- Independent foreclosure review (Wikipedia)