FRB Issues Examination Procedures For Abandoned Foreclosure Process (Consumer Financial Services Alert - July 24, 2012)

The FRB announced the release of examination procedures for abandoned foreclosures, which are foreclosure proceedings that are not completed after they have been initiated. The examination procedures cover safety and soundness and consumer compliance matters as part of the supervisory process, including notification to borrowers, communications, notification to local authorities and obtaining and monitoring collateral values. One important concept identified in the examination procedures, is the idea that banking organizations should employ the same extensive methods in notifying borrowers of the abandoned foreclosures, as they use to contact borrowers in connection with payment collection activities.