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Aurora Bank FSB Consent Order

Aurora Bank FSB Consent Order

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Published by johngaultwhoam
Aurora Bank, the parent of Aurora Loan Services, enters
consent order based on shoddy foreclosure proceedings
Aurora Bank, the parent of Aurora Loan Services, enters
consent order based on shoddy foreclosure proceedings

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Published by: johngaultwhoam on Oct 08, 2011
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 Aurora Bank FSBConsent OrderPage 1 of 24
)In the Matter of ) Order No.: NE-11-16))
) Effective Date: April 13, 2011)Wilmington, Delaware )OTS Docket No. 06069 ))
The Office of Thrift Supervision (OTS), as part of an interagency horizontal review of major residential mortgage servicers, has conducted an examination of the residential real estatemortgage foreclosure processes of Aurora Bank FSB, Wilmington, Delaware (Association). TheOTS has identified certain deficiencies and unsafe or unsound practices in the Association’sresidential mortgage servicing and in the Association’s initiation and handling of foreclosureproceedings. The OTS has informed the Association of the findings resulting from theexamination.The Association, by and through its duly elected and acting Board of Directors (Board),has executed a “Stipulation And Consent To Issuance Of a Consent Order,” dated April 13,2011 (Stipulation and Consent), that is accepted by the OTS. By this Stipulation and Consent,which is incorporated by reference, the Association has consented to the issuance of this ConsentOrder (Order) by the OTS. The Association has committed to taking all necessary andappropriate steps to remedy the deficiencies and unsafe or unsound practices identified by the
 Aurora Bank FSBConsent OrderPage 2 of 24
OTS, and to enhance the Association’s residential mortgage servicing and foreclosure processes.The Association has begun implementing procedures to remediate the practices addressed in thisOrder.
OTS’s Findings.
 The OTS finds, and the Association neither admits nor denies, the following:1. The Association is a servicer of residential mortgages in the United States, and services aportfolio of approximately $77 billion dollars in residential mortgage loans. During the recenthousing crisis, a large number of residential mortgage loans serviced by the Association becamedelinquent and resulted in foreclosure actions.2. In connection with certain foreclosures of loans in its residential mortgage servicingportfolio, the Association engaged in the following unsafe or unsound practices:(a) filed or caused to be filed in state and federal courts numerous affidavits executedby its employees or employees of third-party service providers making various assertions,such as ownership of the mortgage note and mortgage, the amount of the principal andinterest due, and the fees and expenses chargeable to the borrower, in which the affiantrepresented that the assertions in the affidavit were made based on personal knowledge orbased on a review by the affiant of the relevant books and records, when, in many cases,they were not based on such personal knowledge or review of the relevant books andrecords;(b) filed or caused to be filed in state and federal courts, or in local land recordsoffices, numerous affidavits or other mortgage-related documents that were not properlynotarized, specifically that were not signed or affirmed in the presence of a notary;
 Aurora Bank FSBConsent OrderPage 3 of 24
(c) litigated foreclosure and bankruptcy proceedings and initiated non-judicialforeclosure proceedings without always ensuring that the promissory note and mortgagedocument were properly endorsed or assigned and, if necessary, in the possession of theappropriate party at the appropriate time;(d) failed to devote sufficient financial, staffing and managerial resources to ensureproper administration of its foreclosure processes;(e) failed to devote to its foreclosure processes adequate oversight, internal controls,policies, and procedures, compliance risk management, internal audit, third partymanagement, and training; and(f) failed sufficiently to oversee outside counsel and other third-party providershandling foreclosure-related services.
Board Oversight of Compliance with Order.
 3. Within five (5) days, the Board shall designate a committee to monitor and coordinate theAssociation’s compliance with the provisions of this Order (Oversight Committee). TheOversight Committee shall be comprised of three (3) or more directors, which at least two (2)may not be employees or officers of the Association or any of its subsidiaries or affiliates.4. Within ninety (90) days, and within thirty (30) days after the end of each quarterthereafter, the Oversight Committee shall submit a written compliance progress report to theBoard (Compliance Tracking Report). The Compliance Tracking Report shall, at a minimum:(a) separately list each corrective action required by this Order;(b) identify the required or anticipated completion date for each corrective action; and(c) discuss the current status of each corrective action, including the action(s) takenor to be taken to comply with each corrective action.

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