The settlement, reached in 2012, included the five largest mortgage servicers, who settled with the federal government and 49 states over the mishandling of foreclosures before, during and after the 2008 financial meltdown. As part of the $25 billion settlement – one of the largest civil settlements in U.S. history – the servicers were subjected to monitoring to ensure they were in compliance with its terms.
Last week, settlement monitor Joseph A. Smith reported that four of the affected servicers – Bank of America, Chase, Citi and Wells Fargo – were in compliance during the third quarter of 2015, according to MortgageOrb. The settlement specified that its compliance rules would sunset following that time.
“The banks undertook more than 630,000 transactions and provided borrowers with more than $50 billion in consumer relief, and I believe the settlement contributed towards the rebuilding of public trust and confidence in the mortgage market,” Smith said in a statement. “I hope that it will inform future regulation of financial institutions and markets.”
Ocwen, however, will continue under Smith’s supervision as a result of its acquisition of Ally Financial, one of the original banks included in the deal, MortgageOrb reported. In 2014, Ocwen entered into a new consent order with the CFPB that required the company to pay $2.1 billion in consumer relief and comply with the settlement’s servicing standards.
Monitoring for compliance with the terms of the National Mortgage Settlement is now over for most of the affected servicers – but Ocwen isn’t off the hook yet.