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Eligible borrowers and their heirs will be able to claim uncashed payments made pursuant to the 2013 Independent Foreclosure Review Payment Agreement through their respective states' escheatment processes, according to an announcement from the Office of the Comptroller of the Currency (OCC) on Wednesday.
The OCC announced that any uncashed payments made pursuant to the IFR Payment Agreement will be escheated at the end of 2015 in order to allow eligible borrowers and their heirs to claim the funds.
Also on Wednesday, the OCC announced that it has terminated foreclosure-related consent orders against three national mortgage servicers that have met the consent order requirements and imposed business restrictions on six banks that have not met the requirements.
More than $2.7 billion has been distributed to more than 3.2 million eligible borrowers from OCC-supervised institutions as a result of the IFR Payment Agreement, representing about 90 percent of the amount available for distribution, according to the OCC. The agency estimates that about $280 million from OCC-supervised institutions will go unclaimed by the end of this year after all efforts to find remaining eligible borrowers have been exhausted; the escheatment of funds from uncased checks will give eligible borrowers and their heirs an additional opportunity to claim the funds.
The OCC determined that Bank of America, Citibank, and PNC Bank have complied with the orders the agency issued in 2011 and the amendments it issued in 2013 and therefore the consent orders against them have been terminated.
The six institutions that the OCC determined have not met all the requirements of the IFR Payment Agreement were (alphabetically) Everbank, HSBC Bank USA, JPMorgan Chase Bank, Santander Bank, U.S. Bank, and Wells Fargo, and therefore the OCC issued orders to restrict their business activities.
The restrictions include limitations on the acquisition of residential MSR portfolios, new contracts to perform residential mortgage servicing for other parties, the outsourcing or sub-servicing of new residential mortgage servicing activities to other parties, off-shoring new residential mortgage servicing activities, and new appointments of senior officers responsible for residential mortgage servicing. OCC said the restrictions will vary based on the individual circumstances of each bank, and the agency will continue to monitor the corrective actions for these institutions.
Click here to see a complete chart that includes a summary of business restrictions in amended foreclosure-related consent orders.
A spokesman for the OCC told DS News that the restrictions are meant to focus servicer action on meeting the remaining requirements in their respective consent orders, and that the restrictions will not impede consumers' access to mortgage loans.
The Independent Foreclosure Review concluded in January 2013 with 10 mortgage servicers reaching an agreement with the Fed and the OCC to pay a combined total of $8.5 billion to more than 3.8 million homeowners whose homes were in foreclosure in 2009 and 2010. The sum included $3.3 billion to be paid directly to borrowers. The claims allege that the servicers mishandled loan paperwork and robo-signed documents related to the foreclosures. The settlement totals were later increased to 15 servicers and a total of $10 billion in payments, according to the Fed.
