DS News

32 MAXINE WATERS CALLS FOR FURTHER EXAMINATION OF SERVICERS IN 2013 FORECLOSURE SETTLEMENT Rep. Maxine Waters (D-California) wrote a letter to the inspectors general for both the Federal Reserve and the U.S. Department of the Treasury asking for further investigation to determine if any of a group of mortgage servicers missed paying additional borrowers that were owed compensa- tion as part of a 2013 foreclosure settlement. e letter was prompted by news reports that surfaced earlier this month stating Citigroup, one of the servicers named in the settlement, had missed paying some 24,000 borrowers who were owed money from the settlement. Waters, the ranking member of the House Committee on Financial Services, sent her letter in March to Fed Inspector General Mark Bialek and Treasury Inspector General Eric orson asking them to perform further examinations to determine whether other borrowers were missed. e origi- nal settlement was reached more than two years ago between 15 mortgage servicers and the Fed and Office of the Comptroller of the Currency (OCC) to resolve claims of servicing violations during foreclosures. ose 24,000 Citigroup borrowers will receive a combined total of approximately $20 million with payments ranging from a few hundred dollars to $62,500, depending on the harm done to the borrower and the type of servicing error committed. One news report, citing an OCC spokesperson, stated the OCC originally told Citigroup it did not have to include those 24,000 borrowers in the settlement. It was discovered that Citigroup owed those 24,000 borrowers money only after one borrower filed a complaint on an OCC customer assistance website, which was stated in Waters' letter and confirmed by the OCC. "As we said in the past, we are fully com- mitted to fulfilling our obligations under the independent foreclosure review," Citigroup spokesperson Lynn Fogarty said. Earlier in March, when it was reported that 24,000 borrowers were still owed money by Citi- group, spokesman Mark Rodgers told DS News, "We want to make sure that everyone eligible for compensation under the agreement receives what they are due." An Independent Foreclosure Review con- cluded 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. e claims alleged the servicers mishandled loan paper- work and robo-signed documents related to the foreclosures. e settlement totals were later increased to 15 servicers and a total of $10 billion in payments, according to the Fed. Citigroup made cash pay- ments of about $300 million to more than 350,000 borrowers and spent about $500 million on fore- closure prevention, according to an OCC report. FITZPATRICK PLANS TO CONSIDER DIFFERENT APPROACH TO PASSING REGULATORY RELIEF Rep. Mike Fitzpatrick (R-Pennsylvania) said he will explore a change in strategy in order to get some regulatory relief passed, after a bill that would make 12 separate changes to the Dodd-Frank Act was thwarted by the Senate. Fitzpatrick, a member of the House Financial Services Committee, introduced a bill that would give banks an additional two years to dispose of collateralized loan obligations as required by the Volcker Rule, on two separate occasions. In January, the house passed the bill by a vote of 271 to 154, with 29 Democrats voting in favor of it. However, Senate Democrats led by Senator Elizabeth Warren (D-Massachusetts) vowed to fight the bill, and it failed to pass. Democrats, including Warren, said they worry bills that claim to be aimed at relieving regula- tory burdens for small banks are being used to roll back Dodd-Frank for the benefit of the largest financial institutions. Fitzpatrick noted each of the individual alterations included in his legislation, the "Pro- moting Job Creation and Reducing Small Busi- ness Burden Act," had bipartisan support when they passed the full House and his committee. But when packaged together, they have drawn the ire of more liberal Democrats. "ese are the bipartisan ideas," Fitzpatrick said following an appearance in New York. "You package them together and put them on the floor. en [Senator Elizabeth Warren] comes out against one of the 12, and all of a sud- den we lose all our support." e Pennsylvania Republican said he may have to consider a new approach to getting some regulatory relief accomplished, includ- ing possibly lifting the asset threshold that determines whether banks can be classified as systemically important financial institutions. e threshold currently sits at $50 billion. The number of foreclosure starts nationwide in February, a 15 percent decline from January and the third lowest monthly total since August 2006. Source: Black Knight Financial Services STAT INSIGHT 79,700 The serious delinquency rate for residential mortgages was 4.0 percent in February (about 1.5 million homes), the lowest level since June 2008, according to CoreLogic. KNOW THIS

• Cover