Multiyear independent assessment of mortgage servicer’s compliance with settlement agreement
Compliance with mortgage servicing standards
Internal testing review
In April 2012, 49 state attorneys general, the District of Columbia and the federal government reached a historic joint settlement agreement with the nation’s five largest mortgage servicers to address deficient loan servicing practices, including the handling of foreclosures. Grant Thornton LLP was selected by the Office of Mortgage Settlement Oversight (OMSO) to evaluate one of the five mortgage servicers’ compliance with certain servicing standards outlined in the enforcement action.
WHAT THE TEAM DID
Grant Thornton’s team of deeply experienced mortgage banking and compliance professionals is working in concert with the servicer’s internal review group to test its compliance with the 33 metrics established in the settlement. At the onset of the engagement, an overall project plan was established in collaboration with the monitor, the primary professional firm and the servicer’s internal review group. Working with these entities, our team performed walk-throughs of the metrics, population selection queries and sampling methodologies utilized by the servicer, and developed a comprehensive set of tools and templates to use in our validation efforts. Quarterly testing is completed to assess the servicer’s compliance with the servicing standards, including a thorough evaluation of the servicer’s testing programs, policies, procedures and related controls to ensure compliance with the settlement. Grant Thornton’s independent testing of the work of the servicer’s internal review group helps to validate that the servicer is in compliance with the requirements of the National Mortgage Settlement servicing standards.
On a quarterly basis, we provide OMSO and the primary professional firm with a summary of our findings, deficiencies identified, recommendations and the status of remediation efforts, if applicable. The servicing standard compliance testing includes, but is not limited to, single point of contact, adequate staffing levels and training, better communication with borrowers, and appropriate standards for executing documents in foreclosure cases. These activities in turn improve the borrower experience by reducing improper fees and dual-track foreclosures for many loans.