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Watchdog Is Examining Borrower Population of Foreclosure Settlement at Congress’ Request

investigationA federal watchdog announced its intention to issue a response sometime in the third quarter this year to a Congressional request made in March to address the scope of borrowers owed compensation from the 2013 Independent Foreclosure Review (IFR).

U.S. Rep. Maxine Waters (D-California), Ranking Member on the House Financial Services Committee, wrote a letter in March 2015 to the Fed Inspector General Mark Bialek and Treasury Inspector General Eric Thorson asking the Inspectors to determine if any of a group of mortgage servicers missed paying additional borrowers that were owed compensation as part of the IFR. Waters made the request after reports surfaced earlier in March that one of the borrowers named in the settlement, Citigroup, had missed paying some 24,000 borrowers who were owed money.

"We will convey the results of our prior and current work related to the Board's efforts to validate the in-scope borrower population, describe our review of the entire universe of individual borrower complaints received by the Board related to the IFR and the payment agreement, and outline our understanding of the data gaps that existed at servicers supervised by the Federal Reserve System and our understanding of the efforts that have occurred to address those issues," the Fed OIG said.

Maxine Waters

U.S. Rep. Maxine Waters (D-California)

Among other actions the Fed OIG plans to cover in its response are making sure all complaints were handled appropriately and identifying trends to make sure there were no borrowers were overlooked who should have been included in the in-scope population.

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.

"We will convey the results of our prior and current work related to the Board's efforts to validate the in-scope borrower population, describe our review of the entire universe of individual borrower complaints received by the Board related to the IFR and the payment agreement, and outline our understanding of the data gaps that existed at servicers supervised by the Federal Reserve System and our understanding of the efforts that have occurred to address those issues." - Fed OIG

In June 2015, the Office of the Comptroller of the Currency (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.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
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