I have filed a set of five compliance reports with the United States District Court for the District of Columbia as Monitor of the National Mortgage Settlement (NMS or Settlement). The following report summarizes these reports, which detail my review of each servicer’s performance on the Settlement’s servicing reforms. This report includes:

• An overview of the process through which my team and I have reviewed the servicers’ work.
• Summaries of each servicer’s performance for the third quarter 2015.

Pursuant to the Settlement, the requirement to comply with the servicing standards ended for Bank of America, Chase, Citi, Ditech and Wells Fargo as of the end of the third quarter 2015. Accordingly, this is my last report under the NMS for these servicers. Like all mortgage servicers, they are still required to follow servicing-related rules issued by the Consumer Financial Protection Bureau (CFPB). This report does not include an update on compliance by Ocwen or SunTrust in the third quarter 2015. Their obligations to comply with the NMS’s servicing standards continue under their individual settlements. I will file a report on Ocwen’s and SunTrust’s performance for the third and fourth quarters 2015 later this year.

Sincerely,

Joseph A. Smith, Jr.

As required by the Settlement, I filed my final compliance reports with the United States District Court for the District of Columbia (the Court) for five servicers that were subject to the Settlement, including four of the original parties – Bank of America, N.A. (Bank of America); J.P. Morgan Chase Bank, N.A. (Chase); CitiMortgage, Inc. (Citi); and Wells Fargo & Company (Wells Fargo). Essentially all of the servicing assets of the fifth original servicer party, the ResCap Parties, were sold to and divided between Ocwen Financial Corporation (Ocwen) and Green Tree Servicing, LLC (Green Tree), pursuant to a February 5, 2013, bankruptcy court order. Accordingly, Ocwen and Ditech Financial LLC (formerly Green Tree) were subject to the NMS for the portions of their portfolios acquired from the ResCap Parties estate.¹ The reports I filed provide the results of my testing on compliance with the NMS servicing standards during the third quarter 2015. These reports are the seventh set on the original four servicers and the fifth report on Ditech. Copies of all the reports filed with the Court are available on my website, Accordingly, Ocwen and Ditech Financial LLC (formerly Green Tree) were subject to the NMS for the portions of their portfolios acquired from the ResCap Parties estate.1 The reports I filed provide the results of my testing on compliance with the NMS servicing standards during the third quarter 2015. These reports are the seventh set on the original four servicers and the fifth report on Ditech. Copies of all the reports filed with the Court are available on my website, mortgageoversight.com.

As Monitor, I evaluated the servicers using the 29 original metrics, or tests, enumerated in the Settlement and four additional metrics I negotiated with the servicers and the Monitoring Committee. These metrics determined whether the servicers adhered to the servicing standards, or rules, contained in the NMS. The Monitoring Committee is composed of representatives from 15 states, the United States Department of Housing and Urban Development and the United States Department of Justice.

To evaluate the servicers, I worked with a team of professionals. Each servicer followed work plans in which an internal review group (IRG) determined whether the servicer complied with the Settlement terms. My professionals and I then reviewed the work of each servicer’s IRG. I determined if the IRG’s work was satisfactory and reported my findings to the Court and the public. For more information about the oversight and review process, please see my previous reports.

Monitor's Role: Testing a Metric

The Internal Review Groups tested, and my professional firms retested, the servicers’ performance on each metric. The graphic below illustrates the process by which the metrics for each servicer were tested.

Fails: What's Next?

The NMS defines a failed metric as a potential violation and gives the servicer a chance to fix the root causes of its failure. For more information on what happens when a servicer fails a metric, see the graphic below. I also included information on metric fails and corrective action plans (CAPs) in my previous reports.

Oversight Process

This report covers the third quarter 2015, and I tested each of the servicers on up to 33 metrics. The work to test the servicers in the third quarter 2015 involved 176 professionals, including my primary professional firms, secondary professional firms and other professionals who dedicated approximately 21,020 hours over a three-month period.

Neither Bank of America’s IRG nor my professionals found evidence of fails of any of the metrics tested in the third quarter 2015.

Bank of America Scorecard

Neither Chase’s IRG nor my professionals found evidence of fails of any of the metrics tested in the third quarter 2015.

Chase Scorecard

Neither Citi’s IRG nor my professionals found evidence of fails of any of the metrics tested in the third quarter 2015.

Citi Scorecard

Neither Ditech’s IRG nor my professionals found evidence of fails of any of the metrics tested in the third quarter 2015.

In past reports, I have pointed out that the corrective action plans and any required remediation had been completed for all of Ditech’s previous fails except for Metrics 6 and 19, for which remediation efforts were still ongoing at the time. I have now reviewed Ditech’s remediation efforts for Metric 6 and 19 and have determined them to be complete. More information can be found on the corrective action plans for all of Ditech’s fails in my previous report.

Ditech Scorecard

Neither Wells Fargo’s IRG nor my professionals found evidence of fails of any of the metrics tested in the third quarter 2015.

Wells Fargo Scorecard

This is my final report on the original servicers Bank of America, Chase, Citi and Wells Fargo, as well as on Ditech, which acquired a portfolio of loans from the Rescap Parties, an original servicer. These servicers remain accountable under servicing-related rules issued and enforced by the CFPB. As the Settlement prescribes, my testing for these five servicers concludes with this report. The Settlement has improved the way these servicers treat distressed borrowers and, under its consumer relief requirements, the banks undertook more than 630,000 transactions in which it provided borrowers with $50 billion in debt forgiveness, loan modifications, short sale assistance and refinancing at a time when families and the market were subject to distress and uncertainty. I believe the Settlement has contributed towards the rebuilding of public trust and confidence in the mortgage market and hope that it will inform future regulation of financial institutions and markets. I look forward to further discussions on these topics among policymakers, consumer advocates and mortgage servicers. I will continue to report on the performance of SunTrust and Ocwen through the dates prescribed in each of their settlements.