Mortgage Servicers to pay back overcharged homeowners and those who lost their homes to foreclosure
Obscuris vera involvens or "truth is enveloped by obscurity". Have you ever been late with a mortgage payment then seen fees pile up like cars in a rear end collision from that single event? This accounting is illegal but this is how Mortgage Servicers' systems record payments and assess fees. Most people paid the multiple fees then made sure it never happened again. Others, not so lucky, lost their home through foreclosure.
To straighten out a file, a bank employee or consultant must manually piece together every transaction, sort them into a time line so he or she can then figure out what should have happened when before correcting any errors. If that person doesn't perform this task perfectly, they may inadvertently harm a borrower with possible legal liability to their employer. Additionally, this work is time consuming, there are not enough experienced auditors to reconstruct and correct the files of millions of homeowners and former homeowners who have been at the loosing end of the banks' legacy systems.
Last year the largest mortgage servicers signed consent agreements with the Office of the Comptroller of the Currency OCC or the Federal Reserve FRB or both. In it they promised to sample files, identify systemic errors and pay back homeowners for overcharges and improper foreclosures.
To do this work the servicers engaged Independent Consultants IC. The ICs' work is on going and they are due to issue their final reports to the OCC and the FRB soon. In addition to the above, they were charged to identify inaccurate borrower files and calculate remediation to borrowers. Their decision on remediation must be accurate as their word is final, over riding the bank's own results. Borrowers will demand fairness, either individually or, more likely, through class action court challenges.
Institutional Investors such as Mortgage Backed Securities MBS holders are also covered by the consent agreements. The ICs are required by the OCC and the FRB to calculate bank and third party overcharges and fees that were deducted from foreclosure proceeds that are sent to the Institutional Investors. One IC however, Promontory Financial Group, has publicly stated calculating remediation payments to Institutional Investors is not part of the IC mandate. We will see.
To achieve the level of accuracy necessary to insure every borrower file is properly reconstructed and computed requires a level of repeatability and auditability that no human can achieve. Even if there were enough workers, no auditor can know all of the application rules, itself a complex moving target.
In short, automation is needed. Automation can extract the necessary data from various sources, reconstruct payments, charges and events into a time line. This output can be given to the auditors for their analysis. Or, automation can take the next step. Automation can apply contract rules, Federal, State and Local laws, court judgments, institutional investor agreements, Fannie Mae and Freddie Mac rules. Such things as SCRA compliance, Bankruptcy Court payment application schedules, mortgage modification assurance, and legally or contractually permitted charges can be applied and tested.
Unfortunately, mortgage servicers, borrower rights and creditor rights law firms, and GSEs have had no automated way to sort out errors in their processing systems, until now. Our data extraction, normalization and file reconstruction services have solved these and other problems. E-bRM has a comprehensive collection of analytic templates and software as a service applications for most mortgage servicing bottlenecks. Let us prove it. Click on the link below to see a presentation of some of the mortgage servicing issues we can help solve.
E-bRM Mortgage Servicing Data retrieval and normalization service.
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| Legacy Mortgage Servicing system on autopilot, unable to change its path |
To straighten out a file, a bank employee or consultant must manually piece together every transaction, sort them into a time line so he or she can then figure out what should have happened when before correcting any errors. If that person doesn't perform this task perfectly, they may inadvertently harm a borrower with possible legal liability to their employer. Additionally, this work is time consuming, there are not enough experienced auditors to reconstruct and correct the files of millions of homeowners and former homeowners who have been at the loosing end of the banks' legacy systems.
Last year the largest mortgage servicers signed consent agreements with the Office of the Comptroller of the Currency OCC or the Federal Reserve FRB or both. In it they promised to sample files, identify systemic errors and pay back homeowners for overcharges and improper foreclosures.
To do this work the servicers engaged Independent Consultants IC. The ICs' work is on going and they are due to issue their final reports to the OCC and the FRB soon. In addition to the above, they were charged to identify inaccurate borrower files and calculate remediation to borrowers. Their decision on remediation must be accurate as their word is final, over riding the bank's own results. Borrowers will demand fairness, either individually or, more likely, through class action court challenges.
Institutional Investors such as Mortgage Backed Securities MBS holders are also covered by the consent agreements. The ICs are required by the OCC and the FRB to calculate bank and third party overcharges and fees that were deducted from foreclosure proceeds that are sent to the Institutional Investors. One IC however, Promontory Financial Group, has publicly stated calculating remediation payments to Institutional Investors is not part of the IC mandate. We will see.
To achieve the level of accuracy necessary to insure every borrower file is properly reconstructed and computed requires a level of repeatability and auditability that no human can achieve. Even if there were enough workers, no auditor can know all of the application rules, itself a complex moving target.
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| Independent Consultant striving to fairly treat every borrower |
Unfortunately, mortgage servicers, borrower rights and creditor rights law firms, and GSEs have had no automated way to sort out errors in their processing systems, until now. Our data extraction, normalization and file reconstruction services have solved these and other problems. E-bRM has a comprehensive collection of analytic templates and software as a service applications for most mortgage servicing bottlenecks. Let us prove it. Click on the link below to see a presentation of some of the mortgage servicing issues we can help solve.
E-bRM Mortgage Servicing Data retrieval and normalization service.
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