Half a dozen accounting firms have been selected to help oversee compliance by the five banks that agreed to a mammoth national mortgage settlement.
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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 -- that had been accused of so-called "robosigning" of mortgage foreclosure documents.
Joseph A. Smith, monitor of the national mortgage servicing settlement, said in late August that he had engaged five firms to serve as secondary professional firms to oversee compliance by the five servicers 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 professional firm -- 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 professional firm in June.
"Each secondary professional firm 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 professional firms, 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 make up the blend we need to fully implement the settlement."
The SPFs will work with their assigned servicers, and the servicers' internal review groups, to oversee execution of 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.