Walter’s Green Tree Fails Mortgage Servicing Compliance Tests

Green Tree Servicing, a wholly owned subsidiary of Walter Investment Management Corp. (NYSE:WAC), failed eight compliance metrics in connection with loans acquired this year from Residential Capital LLC, the Office of Mortgage Settlement Oversight (OMSO) announced Wednesday.

A summary of six compliance reports filed by Joseph Smith, Jr., monitor of the National Mortgage Settlement, with a Washington, D.C. district court revealed Green Tree did not meet eight of the 29 metrics tested for compliance under NMS guidelines.

The report contains the results from the first quarter Green Tree was tested for the loans it acquired from ResCap parties. In January 2013, Green Tree agreed to service the loan portfolio according to the 300-plus standards of the NMS.

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“After extensive testing, I can confirm that Green Tree failed eight metrics,” stated Smith. “These results show that Green Tree must make significant changes to improve its practices and comply with the Settlement.”

The NMS provides an opportunity for servicers to cure metrics through corrective action plans approved by OMSO, which are already underway, according to a Form 10-Q filed by parent company Walter on May 8, 2014.

“Green Tree is committed to maintaining a highly compliant environment that focuses on high standards of customer service,” stated Mark O’Brien, chairman and CEO of Walter. “We are dedicated to addressing these issues in a timely manner and are confident that the implementation of our corrective action plans will result in a positive outcome during our next review cycle.”

The six compliance reports filed Wednesday detail the results of Smith’s tests to determine the compliance of financial institutions such as Bank of America (NYSE:BAC), Chase (NYSE:JPM), Citi (NYSE:C), Ocwen (NYSE:OCN) and Wells Fargo (NYSE:WFC) with NMS servicing rules from July 1, 2013 to December 31, 2013. 

“Overall, I’m encouraged by the testing results within this report,” Smith stated. “I believe that these results, when compared to my previous reports, show that, under the Settlement, servicers are addressing problems quickly and effectively through focused corrective action plans.”

In addition to the original 29 testing metrics, Smith said OMSO has started testing servicers on the four new metrics issued in October which provide more stringent review on the loan modification process, single point of contact and billing accuracy.

Written by Jason Oliva

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