Board Report: 2014-SR-B-015 September 30, 2014
The scope of our evaluation includes the Board's oversight of the slotting process for the five servicers supervised by the Board that had agreed to the payment agreement in January 2013, including Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley, and SunTrust. Our scope did not include the Board's oversight of the payment agreement as it related to GMAC, another Board-supervised servicer, because that servicer did not agree to the payment agreement until June 2013. Additionally, our scope comprises evaluating the Board's approach to overseeing the mortgage foreclosure consent orders and the Board's oversight of the payment process by Rust and other third parties.
To accomplish our objectives, we interviewed officials from BS&R, DCCA, and the Legal Division who were assigned to oversee this project. We developed interview questions and interviewed officials from the Federal Reserve Banks of Atlanta, Chicago, and New York who were assigned to dedicated teams to assess specific servicer compliance with the consent orders. Additionally, we interviewed staff from third parties involved in implementing the payment agreement, including Rust, Quad/Graphics, and The Huntington National Bank.
We reviewed in detail the Board's guidance to the servicers, to the independent consultants, and to each of the Reserve Bank teams. We also analyzed the slotting for each of the servicers and conducted testing related to the borrower slotting and supporting documentation, including internal audit validation and the review performed by the Reserve Bank dedicated teams. Finally, we reviewed documentation related to Rust's activities as the paying agent, including its issues log and correspondence with borrowers.
We conducted our fieldwork from February 2013 through April 2014. We performed this evaluation in accordance with the Quality Standards for Inspection and Evaluation issued by the Council of the Inspectors General on Integrity and Efficiency.
