Josh Stein

National Mortgage Settlement and
Chase RMBS Settlement Update
NC Affordable Housing Conference
Josh Stein
OCTOBER 15, 2014
National Mortgage Settlement
• 49 states, federal government and five largest mortgage
• $25 billion
o ~$5 billion in direct payments to states and consumers
o ~$20 billion in consumer relief
• 304 servicing standards, or rules, and 29 metrics, or tests
• Monitor established to ensure servicer compliance with consumer
relief and servicing standards
Organizational Structure
Consumer Relief
All five banks received credit for consumer relief requirements in
March 2014. The monitor credited $20.7 billion in total relief.
Consumer Relief by Servicer
Total Gross
Dollar Relief
Total Credited
Total Relief
Bank of America
Wells Fargo
Total consumer
The Monitor’s Final Crediting report is at
Servicing Standards
Testing a Metric
Step One: Bank implements servicing standards
Step Two: Testing by Internal Review Group (IRG)
Step Three: IRG submits Compliance Review Report to the Monitor
Step Four: Retesting by Secondary Professional Firm (SPF), Primary
Professional Firm (PPF) and Monitor
Step Five: Monitor submits report on metrics to the D.C. District Court
Metric Testing Results
Bank of America
Metric 5 (TP3), Metric 6 (TP3), Metric 19 (TP 3), Metric 8
Metric 6 (TP3), Metric 20 (TP3, TP4), Metric 29 (TP 1)
Metric 6 (TP3), Metric 19 (TP2), Metric 23 (TP3)
ResCap Parties
No fails
Green Tree
Metrics 4, 5, 6, 7, 10, 12, 18, 19 (TP6)
Begin testing in TP9 (Q3 2014)
Wells Fargo
Metric 19 (TP2)
Failing a Metric: What’s Next
• Bank implements Corrective Action Plan (CAP).
• If potential violation is widespread, bank compensates all
borrowers experiencing material harm.
• Testing recommences by IRG and Monitor beginning the quarter
after the CAP is completed by bank.
• If bank fails metric again in either of the next two quarters,
Monitoring Committee and Monitor may file enforcement action,
o A court order to stop specific behaviors
o Up to $1 million civil penalty
o Up to $5 million fine for failing particular metrics multiple times
Green Tree and Ocwen
Green Tree Servicing and Ocwen acquired servicing rights and
assets from ResCap Parties.
• ResCap reported eight failed metrics on their portion of the ResCap
portfolio and is implementing corrective action plans.
• Ocwen fully implemented servicing standards for its portion of the
ResCap portfolio and agreed to comply with NMS servicing
standards in its entire portfolio.
• The Monitor will report on Ocwen’s compliance before the end of the
Executive Office Complaints
Professional Complaints
Additional Metrics
The Monitor, Monitoring Committee and Servicers agreed to four
additional metrics.
Compliance testing by IRG began January 2014 to address issues
related to:
• Single points of contact
• Billing statement inaccuracies
Compliance testing by IRGs began April 2014 to address loan
modification process issues related to:
• Missing documents
• Premature denials and appropriate time to provide additional
• Proper communication of loan modification denials
Chase RMBS Settlement
Crediting Process
• Step One: Chase provides relief to borrowers
• Step Two: Chase Submits report to internal review group (HRG)
• Step Three: HRG tests
• Step Four: HRG asserts Chase’s crediting to monitor
• Step Five: Monitor and professional firm test
• Step Six: Monitor creates report on testing results
• Step Seven: Monitor publicly reports findings
Chase RMBS Consumer Relief HRG Assertion
Chase’s HRG asserted that 46,404 borrowers received relief
amounting to $7.6 billion
Chase RMBS Consumer Relief HRG Assertion
Chase’s HRG claimed $868.6 million in relief credit
Chase RMBS Consumer Relief HRG Assertion
Thank You

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