For immediate release
The Federal Reserve Board on Monday released action plans for supervised financial institutions to correct deficiencies in residential mortgage loan servicing and foreclosure processing. It also released engagement letters between supervised financial institutions and independent consultants retained by the firms to review foreclosures that were in process in 2009 and 2010.
The action plans are required by formal enforcement actions issued by the Federal Reserve last year. The enforcement actions direct mortgage loan servicers regulated by the Federal Reserve to submit acceptable plans that describe, among other things, how the institutions will strengthen communications with borrowers by providing each borrower the name of a primary point of contact at the servicer; establish limits on foreclosures where loan modifications have been approved; establish robust, third-party vendor controls; and strengthen compliance programs.
The Federal Reserve enforcement actions also require the parent holding companies of mortgage servicers to submit acceptable plans that describe, among other things, how the companies will improve oversight of servicing and foreclosure processing conducted by bank and nonbank subsidiaries.
The enforcement actions further require the mortgage servicing subsidiaries to provide appropriate remediation to borrowers who suffered financial injury as a result of errors by the servicers. The engagement letters describe the procedures that will be followed by the independent consultants in reviewing servicers’ foreclosure files to determine whether borrowers suffered financial injury as a result of servicer error.
Release of the action plans and engagement letters follows reviews conducted from November 2010 to January 2011, in which examiners found unsafe and unsound processes and practices in residential mortgage loan servicing and foreclosure processing at a number of supervised institutions.
The Federal Reserve will closely follow the implementation of action plans to ensure that the financial institutions correct deficiencies and evaluate any harm that was done to homeowners in the foreclosure process in 2009 and 2010. The Federal Reserve anticipates that more engagement letters and action plans will be posted soon.
For media inquiries, call 202-452-2955
Bank of America
Action Plan:
Cover Letter for Action Plans (PDF)
Executive Summary Letter (2.1 MB PDF)
Section 2 – Board Oversight (PDF)
Section 2 – Appendix 1.1–Board Oversight (07/12/2011) (PDF)
Section 2 – Appendix 1.1–Board Oversight (12/13/2011) (PDF)
Section 3 – Risk Management (PDF)
Section 3 – Appendix 2.1–Risk Management (07/12/2011) (PDF)
Section 3 – Appendix 2.1–Risk Management (12/13/2011) (PDF)
Section 4 – Compliance (PDF)
Section 4 – Appendix 3.1–Compliance (07/12/2011) (PDF)
Section 4 – Appendix 3.1–Compliance (12/13/2011) (PDF)
Section 5 – Audit (PDF)
Section 5 – Appendix 4.1–Audit (07/12/2011) (PDF)
Section 5 – Appendix 4.1–Audit (12/13/2011) (PDF)
Citigroup
Action Plan:
Section 2 – Board Oversight (4.3 MB PDF)
Section 3 – Risk Management (4.4 MB PDF)
Section 4 – Compliance (4.5 MB PDF)
Section 6 – CitiFinancial Financial Activities (PDF)
Section 7 – CitiFinancial Oversight Policy (5 MB PDF)
EverBank
Action Plan:
Section 2 – Board Oversight (PDF)
Section 7 – Risk Management (PDF)
Section 8 – Compliance (PDF)
Section 9 – Audit (PDF)
JPMorgan Chase
Engagement Letter (12 MB PDF)
Action Plan:
Section 2 – Board Oversight–Executive Summary (PDF)
Section 5 – Compliance–Executive Summary (PDF)
Section 5 – Compliance (PDF)
Section 6 – Audit–Executive Summary (PDF)
Section 6 – Audit (PDF)
Section 7 – Risk Management–Executive Summary (PDF)
Section 7 – Risk Management (PDF)
MetLife
Action Plan:
Sections 2,3,4,5 – Status Report Update (PDF)
Sections 2,3,4,5 – Combined (PDF)
Section 5 – Response Email (PDF)
Section 5 – Additional Information (PDF)
PNC
Action Plan:
Sections 2,3,4,5 – Combined (PDF)
SunTrust
Engagement Letter (12 MB PDF)
Action Plan:
Section 2 – Board Oversight (PDF)
Section 6 – Single Point of Contact (PDF)
Section 7 – Third Party Management (PDF)
Sections 8,9 – Compliance (PDF)
Section 10 – MERS (PDF)
Section 11 – Management Information Systems (PDF)
Section 12 – Training (PDF)
Sections 15,16 – Risk Management (PDF)
Section 17 – Audit Plan (PDF)
Section 18 – Audit Program (PDF)
US Bancorp
Final Plan (PDF)
Wells Fargo
Action Plan:
Section 2 – Summary of Board Governance and Oversight Structure (PDF)
Section 2a – Board Oversight (PDF)
Section 2b – Board Oversight (PDF)
Section 2c – Board Oversight (PDF)
Section 2d – Board Oversight (PDF)
Section 3a – Enterprise Risk Management (PDF)
Section 3b – Enterprise Risk Management (PDF)
Section 3c – Enterprise Risk Management (PDF)
Section 4a – Compliance Risk Management (PDF)
Section 4b – Compliance Risk Management (PDF)
Section 4c – Compliance Risk Management (PDF)
Section 5 – Audit (PDF)
