Magazine article American Banker

Fed Releases Plan to Improve Servicing at Citi, HSBC

Magazine article American Banker

Fed Releases Plan to Improve Servicing at Citi, HSBC

Article excerpt

Byline: Donna Borak

WASHINGTON a The Federal Reserve Board on Thursday released the last details of how two mortgage servicers a Citigroup Inc. (NYSE: C) and HSBC Finance Corp. (HTB) a plan to fix problems in their home loan servicing and foreclosure processes.

The Fed and the Office of the Comptroller of the Currency issued orders in April requiring the 14 largest servicers to address deficiencies in their foreclosure practices and hire independent consultants to investigate past foreclosure errors.

Of the redacted documents released by the Fed, it included Citi's 45-page action plan along with a 46-page plan by HSBC.

The plans establish detailed guidelines the servicers must follow to comply with the regulatory orders, covering such areas as board oversight, operations training and risk management. They also establish firm deadlines for meeting the orders' requirements.

Citi specified a number of steps it was taking to correct weaknesses including strengthening their business model to improve the customer's experience and institute better governance.

For its part, HSBC said it would be revising its policies to add an additional trigger point at which a single point of contact would be assigned to a customer during the foreclosure process.

The Fed also released an engagement letter between Ally Financial Inc. and its independent consultant, PricewaterhouseCoopers, which reviewed all the foreclosures the company processed in 2009 and 2010. …

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