National Mortgage Settlement and Chase RMBS Settlement UpdateNC Affordable Housing Conference

OCTOBER 15, 2014

Josh Stein

National Mortgage Settlement

• 49 states, federal government and five largest mortgage servicers

• $25 billion o ~$5 billion in direct payments to states and consumerso ~$20 billion in consumer relief

• 304 servicing standards, or rules, and 29 metrics, or tests

• Monitor established to ensure servicer compliance with consumer relief and servicing standards

Organizational Structure

Consumer Relief

All five banks received credit for consumer relief requirements in March 2014. The monitor credited $20.7 billion in total relief.

Consumer Relief by Servicer

Consumer Relief

Loans Total Gross Dollar Relief

Total Credited Relief

Total Relief Obligations

Bank of America 317,028 $27,344,833,073 $9,610,418,492 $8,574,200,000

Chase 125,553 $11,124,434,955 $4,463,524,210 $4,212,400,000

Citi 58,822 $3,515,708,965 $1,792,967,705 $1,789,000,000

ResCap 7,434 $554,086,749 $257,411,785 $200,000,000

Wells Fargo 122,719 $7,923,863,398 $4,568,334,894 $4,337,000,000

Total consumer relief

631,556 $50,462,927,140 $20,692,657,086 $19,112,600,000

The Monitor’s Final Crediting report is at www.JASmithMonitoring.com/OMSO

Servicing Standards

Testing a Metric

Step One: Bank implements servicing standards

Step Two: Testing by Internal Review Group (IRG)

Step Three: IRG submits Compliance Review Report to the Monitor

Step Four: Retesting by Secondary Professional Firm (SPF), Primary Professional Firm (PPF) and Monitor

Step Five: Monitor submits report on metrics to the D.C. District Court

Metric Testing Results

Servicer Fails

Bank of America Metric 5 (TP3), Metric 6 (TP3), Metric 19 (TP 3), Metric 8 (TP3)

Chase Metric 6 (TP3), Metric 20 (TP3, TP4), Metric 29 (TP 1)

Citi Metric 6 (TP3), Metric 19 (TP2), Metric 23 (TP3)

ResCap Parties No fails

Green Tree Metrics 4, 5, 6, 7, 10, 12, 18, 19 (TP6)

Ocwen Begin testing in TP9 (Q3 2014)

Wells Fargo Metric 19 (TP2)

Failing a Metric: What’s Next

• Bank implements Corrective Action Plan (CAP).

• If potential violation is widespread, bank compensates all borrowers experiencing material harm.

• Testing recommences by IRG and Monitor beginning the quarter after the CAP is completed by bank.

• If bank fails metric again in either of the next two quarters, Monitoring Committee and Monitor may file enforcement action, including: o A court order to stop specific behaviorso Up to $1 million civil penaltyo Up to $5 million fine for failing particular metrics multiple times

Green Tree and Ocwen

Green Tree Servicing and Ocwen acquired servicing rights and assets from ResCap Parties.

• ResCap reported eight failed metrics on their portion of the ResCap portfolio and is implementing corrective action plans.

• Ocwen fully implemented servicing standards for its portion of the ResCap portfolio and agreed to comply with NMS servicing standards in its entire portfolio.

• The Monitor will report on Ocwen’s compliance before the end of the year.

Executive Office Complaints

Professional Complaints

Additional Metrics

The Monitor, Monitoring Committee and Servicers agreed to four additional metrics.

Compliance testing by IRG began January 2014 to address issues related to:• Single points of contact• Billing statement inaccuracies

Compliance testing by IRGs began April 2014 to address loan modification process issues related to:• Missing documents• Premature denials and appropriate time to provide additional

documentation• Proper communication of loan modification denials

Chase RMBS Settlement

Crediting Process

• Step One: Chase provides relief to borrowers

• Step Two: Chase Submits report to internal review group (HRG)

• Step Three: HRG tests

• Step Four: HRG asserts Chase’s crediting to monitor

• Step Five: Monitor and professional firm test

• Step Six: Monitor creates report on testing results

• Step Seven: Monitor publicly reports findings

Chase RMBS Consumer Relief HRG Assertion

Chase’s HRG asserted that 46,404 borrowers received relief amounting to $7.6 billion

Chase RMBS Consumer Relief HRG Assertion

Chase’s HRG claimed $868.6 million in relief credit

Chase RMBS Consumer Relief HRG Assertion

Thank YouJASmithMonitoring.com