Fed Releases Action Plans of Three More Servicers

The Federal Reserve Board on Thursday released details on steps three more mortgage servicers are taking to correct deficiencies in their foreclosure practices.

The agency has been under pressure from Congress and consumer groups to disclose the action plans of the 14 financial firms that were ordered by regulators last year to fix their foreclosure processes and hire third-party consultants to investigate past errors. Last week it released the action plans of eight servicers — including Citigroup Inc., Wells Fargo & Co. and Bank of America Corp. — and followed up this week by releasing the plans of HSBC North America Holdings Inc., Ally Financial Inc. and IMB HoldCo. LLC.

The plans, each of which are hundreds of pages long, 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.

Along with the action plans for the three companies, the Fed also released a 64-page letter from Ernst & Young explaining how the consulting firm will handle its review of HSBC's past foreclosure practices. Among steps it intends to take to identify potential borrowers who may suffered "financial injury," Ernst & Young said it would conduct "robust borrower outreach for complaints" among segments of the population that are viewed as "higher risk."

It said in that cases where it does find that HSBC failed to follow proper foreclosure protocols, it would work with the bank to develop a remediation plan for the borrower.