DS News

54 OCC PLACES SERVICING RESTRICTIONS ON CHASE, WELLS FARGO, AND OTHERS Eligible borrowers and their heirs will be able to claim uncashed payments made pursuant to the 2013 Independent Foreclosure Review (IFR) Payment Agreement through their respective states' escheatment processes, according to an announcement from the Office of the Comptroller of the Currency (OCC) in mid-June. e 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 in June, the OCC announced 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. e agency estimates 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 uncashed checks will give eligible borrowers and their heirs an additional opportunity to claim the funds. e OCC determined 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. e six institutions the OCC determined have not met all the requirements of the IFR Payment Agreement were Everbank, HSBC Bank USA, JPMorgan Chase Bank, Santander Bank, U.S. Bank, and Wells Fargo. e OCC issued orders to restrict their business activities. e 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. e 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. A spokesman for the OCC told DS News the restrictions are meant to focus servicer action on meeting the remaining requirements in their respective consent orders and the restrictions will not impede consumers' access to mortgage loans. e 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. e sum included $3.3 billion to be paid directly to borrowers. e claims allege the servicers mishandled loan paperwork 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. FRESH OFF RMBS DEAL OF THE YEAR AWARD, FIFTH STACR OF 2015 PRICED AT $950 MILLION Less than one week after Freddie Mac's Structured Agency Credit Risk (STACR) debt notes received the RMBS Deal of the Year award from Global Capital, Freddie Mac announced the pricing of the fifth STACR offering of 2015 in mid-June. e latest STACR debt notes offering, 2015-DNA2, was priced at $950 million (pend- ing market conditions), making it the second- highest total for a STACR offering this year. e third offering was originally announced in April at $720 million but shortly increased up to $1.01 billion due to market demand. Freddie Mac expects to make eight STACR offerings in 2015. e 2015-DNA2 offering will be Freddie Mac's second offering in which losses will be allocated based on actual losses realized on the related reference obligations rather using a fixed severity approach to allocate losses (the first such transaction for Freddie Mac occurred in May, priced at $425.6 million). e reference pool of single-family mortgages for Series 2015-DNA2 includes loans originated from August to November 2014 with an ag- gregate UPB of more than $31.9 billion. Co-lead managers and joint bookrunners for the transaction are Merrill Lynch, Pierce, Fenner & Smith, and JPMorgan Securities. Freddie Mac holds the senior loss risk in the reference pool as well as a portion of the risk for Class M-1, M-2, M-3 and the first loss Class B tranche; the M-1, M-2, M-3, and MACR classes are rated by Kroll Bond Rat- ings Agency and Moody's. Freddie Mac transfers a portion of credit risk on certain single-family loans to private investors using the STACR program and has led the market in introducing new risk-shar- ing initiatives in the last two years. Since ini- tiating the program in 2013, Freddie Mac has laid off a portion of credit risk on more than $281 billion in unpaid principal balance for single-family mortgages through 13 STACR offerings and seven Agency Credit Insurance Structure (ACIS) transactions. More than 1 million loans have been represented in those transactions. e STACR offerings have received two major awards in the last two years. In addi- tion to the June announcement of receiving the RMBS Deal of the Year award from GlobalCapital, STACR received the Global Structured Deal of the Year Award from Glo- balCapital's parent company, Euromoney, in 2014. Kevin Palmer, VP of credit risk transfer at Freddie Mac, said the enterprise is "proud of our role in leading market innovations that return value to the nation and move housing forward."

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