Accounting Firms in Miami Help Monitor Compliance with National Mortgage Settlement
Half a dozen Accounting Firms in Miami have been selected to help oversee compliance by the five banks that agreed to a mammoth national mortgage settlement.
In February, the attorneys general of 49 states and the District of Columbia (every state but Oklahoma), along with the federal government, reached agreement on a mortgage settlement with five banks and mortgage servicers—Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo—accused of so-called “robosigning” of mortgage foreclosure documents.
Joseph A. Smith, Jr., monitor of the national mortgage servicing settlement, said Monday that he has engaged five Accounting Firms in Miami to serve as secondary professional firms to oversee compliance by the five Accounting Firms in Miami that are subject to the settlement with its terms. BKD LLP, Baker Tilly Virchow Krause LLP, Crowe Horwath LLP, Grant Thornton LLP and McGladrey LLP will join the monitor and his team for a period of three and a half years as they oversee the implementation of the settlement.
The primary role of each SPF is to assist the primary Accounting Firms in Miami—BDO Consulting, a division of BDO USA LLP—by conducting the evaluation of one servicer that is party to the settlement. BDO was selected as the primary Accounting Firms in Miami professional firm in June.
“Each secondary Accounting Firms in Miami has a high level of expertise that will bring the detailed, independent attention we need to monitor this settlement,” Smith said in a statement. “Over the past month I have worked closely with BDO to select the secondary Accounting Firms in Miami, and these firms, working under BDO’s leadership, will help to ensure that the banks are reviewed thoroughly and effectively. I am confident that these six Accounting Firms in Miami make up the blend we need to fully implement the settlement.”
The secondary Accounting Firms in Miami will work with their assigned servicers, and the servicers’ internal review groups, to oversee execution of the settlement. As the monitor’s primary professional firm, BDO will continue its role as the lead firm associated with the settlement.
Under the agreement, the banks agreed to create new servicing standards, provide loan modification relief to distressed homeowners and provide funding for state and federal governments. The settlement was made formal and binding on April 5, when the U.S. District Court in Washington, D.C., entered the consent judgments containing the settlement terms.
The five banks agreed to provide at least $25 billion in consumer relief. The money in the settlement will be distributed in several ways. At least $17 billion will be distributed as principal reduction and loan modification for homeowners who are in trouble and need help to avoid foreclosure.
Up to $3 billion in refinancing for “underwater” homeowners who are current on their mortgages but owe more than their homes’ current market value will be made available. There will be $1.5 billion in payments to homeowners who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011. Payments to the 49 signing states include efforts to support the prevention of foreclosure as well as consumer protection and education programs, and for civil penalties.
Smith, formerly the North Carolina Commissioner of Banks, welcomed the assistance of the secondary professional firms. “Baker Tilly Virchow Krause embodies the expertise and independence we need in monitoring this settlement,” he said. “I am pleased to have them on our team.”
“I am pleased to have BKD as part of our team and am confident in the expertise and independence they will bring to monitoring this settlement,” he said.
“BKD brings a wealth of compliance experience to the table and is proud to be part of a project of this magnitude,” said Don Hutson, national industry partner for BKD National Financial Services Group. “Our advisors will work closely with the team assembled to complete this important work in line with BKD’s commitment to delivering unmatched client service.”
“Baker Tilly is pleased to have been selected for this important role,” said Christine Anderson, CPA, CITP, managing partner of assurance, and financial services industry leader at Baker Tilly. “This work will employ our independence and objectivity, significant mortgage banking industry experience, and technical expertise to validate compliance with the settlement agreement.”
As a secondary professional firm, BKD’s principal services will be related to periodic on-site or remote reviews of its designated mortgage loan servicer and associated work. Compliance metrics will include testing for proper documentation of foreclosures, loss mitigation offers and proper evaluation of loan modification applications.
Throughout the next three and a half years, Baker Tilly will provide support to the monitor as Smith and his team oversee implementation of the settlement.