Audit Report

OIG-18-046

FINANCIAL REGULATION AND OVERSIGHT 

Review of Circumstances Surrounding Citibank’s Exclusion of InScope Borrowers

July 10, 2018

Office of

Inspector General

Department of the Treasury
This Page Intentionally Left Blank
Contents

Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers

(OIG-18-046) Page i

Audit Report................................................................................................. 1

Background ................................................................................................ 3

Results of Audit .......................................................................................... 5

Borrowers Initially Omitted from Citibank’s In-Scope Population Were Later

Discovered and Checks Were Mailed .................................................... 5

OCC Relied on Servicers to Validate the Universe of In-Scope

Borrowers.................... ..................................................................... 7

OCC’s Process for Tracking and Vetting Questions, Complaints, and Appeals

Was Reasonable................................................................................. 10

OCC Provided Guidance to the Paying Agents in the Form of a 

Telephone Script for Processing Questions, Complaints, and Appeals ....... 14

OCC Monitored the Identification of In-Scope Borrowers and Noted Concerns, 

and Corrective Actions Were Taken by the Servicers .............................. 15

Conclusion ................................................................................................. 15

Appendices

Appendix 1: Request to Treasury OIG for Report on Circumstances Surrounding 

Citibank’s Exclusion of In-Scope Borrowers.............................. 17

Appendix 2: Objectives, Scope, and Methodology ...................................... 19

Appendix 3: Management Response ......................................................... 22

Appendix 4: Major Contributors to This Report........................................... 23

Appendix 5: Report Distribution................................................................ 24

Abbreviations

Ally Ally Financial Inc.

Aurora Aurora Bank, FSB

BCFP Bureau of Consumer Financial Protection

Board Board of Governors of the Federal Reserve System

CAG Customer Assistance Group

Citibank Citibank N.A.

CitiResidential CitiResidential Lending, Inc.

Epiq Epiq Class Action & Claims Solutions, Inc.

IFR independent foreclosure review

OCC Office of the Comptroller of the Currency

OIG Office of Inspector General
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(OIG-18-046) Page ii

OTS Office of Thrift Supervision

PNC PNC Bank, N.A.

Rust Rust Consulting, Incorporated

SCRA Servicemembers Civil Relief Act

SunTrust SunTrust Banks, Inc., SunTrust Bank, and SunTrust Mortgage

US Bank U.S. Bank, N.A. and U.S. Bank N.A., ND

Wells Fargo Wells Fargo Bank, N.A.
OIG Audit

Report

The Department of the Treasury

Office of Inspector General

Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers 

(OIG-18-046) Page 1 

July 10, 2018 

Joseph M. Otting

Comptroller of the Currency

This report presents the results of our review of the Office of the 

Comptroller of the Currency’s (OCC) oversight of the determination 

of the population of in-scope borrowers1

1 Borrowers who were in the foreclosure process in 2009 and 2010. 

related to the foreclosure 

consent orders issued in April 2011, and subsequently amended in 

February 2013.2

2

 In February 2013, OCC and the Board of Governors of the Federal Reserve System (Board) entered 

into amended consent orders with Bank of America, N.A.; Citibank, N.A. (Citibank); Goldman Sachs

Group, Inc.; HSBC Bank USA, N.A.; JPMorgan Chase Bank, N.A.; MetLife Bank, N.A.; Morgan 

Stanley; PNC Bank, N.A. (PNC); U.S. Bank, N.A. and U.S. Bank N.A., ND (collectively U.S. Bank); 

Wells Fargo Bank, N.A. (Wells Fargo); Aurora Bank, FSB (Aurora); Sovereign Bank, N.A.; and, 

SunTrust Banks, Inc., SunTrust Bank, and SunTrust Mortgage (hereinafter SunTrust). Ally Financial 

Inc. (Ally) entered into an amended consent order with the Board in July 2013. Similarly, EverBank 

entered into an amended consent order with the OCC in August 2013.

We performed this review at the request of the 

Ranking Member of the House Committee on Financial Services.3

3

 The Office of Inspector General (OIG) of the Board and the Bureau of Consumer Financial Protection 

received the same request. The results of its review of the Board’s oversight of the determination of 

the population of in-scope borrowers was issued under separate cover on September 30, 2015

entitled Congressional Request Related to the In-Scope Borrower Population of Independent 

Foreclosure Review and the Subsequent Payment Agreement. 

The request letter is provided in appendix 1. 

Consistent with the Congressional request, our objectives were to

determine: (1) the facts and circumstances surrounding the 

increase in the population of Citibank, N.A.’s4

4 Citibank includes CitiMortgage, Inc. and CitiFinancial Credit Corporation and its subsidiaries as these 

were the only two Citibank entities engaged in mortgage servicing operations in the United States 

during the consent order period. CitiMortgage, Inc. serviced loans on behalf of itself and its affiliates 

including Citibank, N.A., Citicorp USA, Citicorp Trust Bank, Citigroup Global Markets Realty 

Corporation, CitiResidential Lending, Inc., and CitiFinancial Credit Corporation and its subsidiaries.

 (hereinafter Citibank) 

in-scope borrowers; (2) the methodology used and procedures 

performed by OCC to test and validate the universe of in-scope 

 
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borrowers and whether such borrowers were appropriately sent 

checks for the five servicers not covered in the prior Office of 

Inspector General (OIG) review5

5

 We reviewed the following servicers: Bank of America, N.A.; JPMorgan Chase, N.A.; HSBC Bank 

USA, N.A.; MetLife Bank, N.A. and Sovereign Bank, N.A. in our prior audit entitled OCC Needs to 

Ensure Servicers Implement Amended Foreclosure Consent Orders and Act on Identified Weaknesses

(OIG-14-044; August 6, 2014).

(Citibank; PNC Bank, N.A. (PNC); 

U.S. Bank, N.A. and U.S. Bank, N.A., ND (collectively U.S. Bank); 

Wells Fargo Bank, N.A. (Wells Fargo); and EverBank6

6

 Aurora was one of the original servicers who agreed to the settlement in January 2013. Per the 

congressional request, we included Aurora in our engagement letter sent to OCC since it was one of 

the servicers not reviewed in the prior audit of amended foreclosure consent orders. After being told 

by OCC officials that Aurora had surrendered its charter in March 2013 and its consent order had 

been terminated, we removed it from the list of servicers under review and replaced it with 

EverBank, who joined the settlement in late August 2013.

); (3) OCC’s 

process for vetting any individual questions, complaints, or 

requests for appeal related to the in-scope population from 

borrowers; (4) any direction that OCC has provided to servicers 

outlining how the servicer should process questions, complaints, or 

requests to appeal the determination of the in-scope population 

that they receive from borrowers; and (5) what data gaps existed 

within servicers’ systems that made it difficult to identify in-scope 

borrowers and whether such data gaps or system integration issues

have been fixed.

To accomplish these objectives, we interviewed OCC officials 

including the Director of the Customer Assistance Group (CAG), 

the organization within OCC that is responsible for managing 

OCC’s complaint process. In addition, we reviewed OCC’s 

documentation of the circumstances surrounding Citibank’s 

omission of in-scope borrowers, the determination of the in-scope 

population for the five servicers not covered in prior OIG reviews, 

and the processing of borrowers’ in-scope related complaints. 

Appendix 2 contains a more detailed description of our objectives, 

scope, and methodology.

In brief, we found that OCC took immediate action to determine 

the total borrowers omitted from Citibank’s in-scope population 

once the error was discovered and ensured checks were mailed to 

the affected borrowers in accordance with the Independent 

Foreclosure Review (IFR) payment agreement. We found that 

OCC’s process for determining the in-scope population of 

 
Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers 

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borrowers was reasonable and consistent with the process 

reviewed in our prior audit of the amended consent orders (OIG-14-

044; August 6, 2014). OCC identified system errors during its 

oversight of this process and directed the respective servicers to 

take corrective action. We also found that OCC had a borrower 

complaint process that sought to address borrowers’ concerns 

regarding their in-scope status in a reasonable manner. Further, we 

found that all servicers reviewed by OCC had identified data gaps 

and/or system integration issues and took corrective actions to 

mitigate those issues.

We are not making any recommendations to OCC as a result of our 

audit. We provided a draft of this report to OCC management for 

its review. In a written response, which is included as appendix 3, 

OCC thanked our office for the opportunity to review the report 

and advised that it had no comments. 

Background

In April 2011, OCC, the former Office of Thrift Supervision7

7

 Effective July 21, 2011, in accordance with Public Law 111-203, the functions of OTS were 

transferred to the Board, the Federal Deposit Insurance Corporation, and OCC. The foreclosure 

related consent Orders issued by OTS prior to transfer remained in effect and enforceable by OCC.

(OTS), 

and the Board of Governors of the Federal Reserve System (Board) 

issued foreclosure related consent orders against 14 major 

mortgage servicers (8 supervised by OCC, 4 supervised by OTS, 

and 2 by the Board)

8

8

 The 8 OCC supervised servicers were Bank of America, N.A.; Citibank; HSBC Bank USA, N.A.; 

JPMorgan Chase Bank, N.A.; MetLife Bank, N.A.; PNC; U.S. Bank; and Wells Fargo. The 4 OTS 

supervised servicers were Aurora; EverBank; OneWest Bank, FSB; and Sovereign Bank, N.A. The 2 

Board supervised servicers were Ally and SunTrust.

for unsafe and unsound practices in 

residential mortgage servicing and foreclosure processing.

Additionally, the Board issued consent orders against Goldman 

Sachs Group, Inc., in September 2011, and Morgan Stanley in April 

2012, which brought the total number of servicers subject to 

foreclosure related consent orders to 16. These unsafe and 

unsound practices were identified during a horizontal review9

9

 The term horizontal review refers to a bank examination in which the regulator simultaneously 

performs the same examination procedures across a group of institutions.

performed by the regulators in 2010. Pursuant to these orders, the 

servicers engaged independent consultants to perform IFRs to 

 
Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers 

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identify and remediate financial injury to borrowers who were in 

the foreclosure process in 2009 and 2010.10

10 These borrowers became known as in-scope borrowers.

These reviews were 

performed during 2011 and 2012. The consent orders also required 

that servicers develop and implement various corrective action 

plans to address the unsafe and unsound practices that had been 

identified. 

In November 2012, OCC officials concluded that the IFR process 

was taking longer than anticipated and delaying the compensation 

to harmed borrowers. Working in conjunction with the Board, OCC 

began negotiating changes to the original consent orders with the 

servicers. In January 2013, new terms, which included payment 

agreements, were agreed to and in February 2013 OCC and the 

Board amended the existing foreclosure consent orders to 

incorporate the new terms for 13 of the 16 servicers subjected to 

the original consent orders issued in April and September 2011 and 

April 2012 (10 supervised by OCC and 3 supervised by the 

Board).11

11 The 10 OCC supervised servicers are Aurora ; Bank of America, N.A.; Citibank; HSBC Bank USA, 

N.A.; JPMorgan Chase Bank, N.A.; MetLife Bank, N.A.; PNC; Sovereign Bank, N.A.; U.S. Bank; and 

Wells Fargo (As discussed in Footnote 7, Aurora and Sovereign Bank, N.A. were transferred to OCC). 

The 3 Board supervised servicers are Goldman Sachs Group, Inc.; Morgan Stanley; and SunTrust.

 Two of the remaining three servicers ultimately entered 

into an amended consent order, Ally in July 2013 and EverBank in 

August 2013, while OneWest Bank, FSB never entered into an 

amended consent order. The payment agreements required the 

servicers to provide payments to in-scope borrowers based on 

possible harm.

For the participating servicers, the amended orders required them 

to immediately cease most IFR activity, make cash deposits to a 

Qualified Settlement Fund established to make payments to 

potentially harmed borrowers, and initiate a range of foreclosure 

prevention actions. Under the amended orders, servicers were 

required to categorize borrowers according to the most likely type 

of potential financial harm suffered as a result of the servicer’s 

foreclosure practices. The category in which a potentially harmed 

borrower was placed determined the cash payment amount. OCC 

and the Board developed the categories and associated payment 

amounts. OCC officials told us that if a borrower fell into more 

 
Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers 

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than one category, the borrower was placed in the category that 

yielded the highest payment.

The servicers engaged Rust Consulting, Incorporated (Rust), as the 

paying agent to manage the distribution process.12

12 Rust provides project management, data management, notification, contact center, claims 

processing, and distribution reporting to customers in the public, legal, and business sectors.

Previously, Rust 

served as the single integrated claims processor for the April 2011 

foreclosure related consent orders. Rust was responsible for setting 

up and administrating the Qualified Settlement Funds and 

performing operational activities to distribute cash payments to 

eligible borrowers.13

13 There are four Qualified Settlement Funds for the amended consent orders: Fund 1 for 11 of the 

OCC and Board-supervised institutions (Aurora; Bank of America, N.A.; Citibank; HSBC Bank USA, 

N.A.; JPMorgan Chase Bank, N.A.; MetLife Bank, N.A.; PNC; Sovereign Bank, N.A.; SunTrust; U.S. 

Bank; and Wells Fargo); Fund 2 for the Board-supervised institutions (Goldman Sachs Group, Inc. and

Morgan Stanley); and Fund 3 for the Board-supervised Ally. A separate fund, or Fund 4, for EverBank 

was administered by Epiq Class Action & Claims Solutions, Inc. (Epiq).

These operational activities included issuing 

and reissuing checks, following up on undeliverable mail, providing 

a call center and customer support, and providing activity 

reporting. Payments to potentially harmed borrowers began in April 

2013.

Results of Audit

Borrowers Initially Omitted from Citibank’s In-Scope 

Population Were Later Discovered and Checks Were 

Mailed

We reviewed documentation of the circumstances surrounding the 

omission of the Citibank borrowers from the in-scope population 

and were able to confirm that the information gathered during 

interviews with OCC officials accurately represented the facts of 

the omission.

Citibank initially identified approximately 24,000 CitiResidential 

Lending, Inc. (hereinafter CitiResidential) loans14 in the population 

14 CitiResidential, an affiliate of Citibank, sold a portion of its residential mortgage loan portfolio to 

American Home Mortgage Servicing and CitiMortgage in February 2009, approximately 41 days into 

the foreclosure period covered by the consent orders of 2011. These “first-lien” loans were serviced 

by CitiResidential and considered in-scope for Citibank for IFR purposes.

 
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of in-scope borrowers at the onset of the IFR process according to 

its engagement letter, dated September 23, 2011, with 

PricewaterhouseCoopers, its independent consultant. In August 

2011, a CitiMortgage official questioned OCC as to whether such 

loans held by Citibank, but not in its primary mortgage service line 

were subject to the consent order. An OCC official responded to 

the servicer that “we in the end chose to target only foreclosure 

actions initiated or completed on owner-occupied, 1-4 family 

dwellings by divisions of the institution that process first lien 

foreclosures.” This response to the servicer prompted the bank 

officials to exclude these CitiResidential loans from the in-scope 

population for IFR.

In April 2013, a private citizen filed a complaint with OCC that 

uncovered this omission of borrowers and prompted a review by 

OCC. The same citizen had filed a complaint regarding the same 

matter with the Bureau of Consumer Financial Protection (BCFP) in 

2012, but there was no reference in the complaint to the IFR 

process. We determined that Citibank responded directly to the 

borrower, stating in essence that the loan was “out-of-scope” of 

the IFR process. OCC became aware of the complaint filed with the 

BCFP and the servicer’s decision after OCC had begun its review in 

2013. OCC officials took responsibility for the omission of these 

loans from the in-scope population as they believed it was caused 

by a misinterpretation of the guidance provided by an OCC official 

to the servicer in August 2011.

As a result, OCC required Citibank to include these loans in its inscope population and to treat the borrowers as if they had filed a 

Request for Review, as a concession.15

15 The original foreclosure related consent orders required that, as part of the IFR process, each servicer

establish a process for borrowers who believed they had been financially harmed by the servicer’s 

foreclosure related deficiencies to make submissions to be considered for remediation. These 

submissions were known as Requests for Review.

This class of borrowers 

was compensated higher than those who did not file a Request for 

Review under the IFR process. The final total number of loans

omitted from Citibank’s population of in-scope borrowers was 

24,239, and they were categorized16 as follows:

16 OCC and the Board developed 11 categories that in-scope borrowers would be placed into according 

to the most likely type of potential financial harm suffered as a result of the servicer’s foreclosure 

practices.

 
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• Foreclosure while in Bankruptcy – 436

• Performing Forbearance Plan - 3 

• Modification Approvals - 747

• No Loss Mitigation Engagement - 22,103

• Other - 950

Over 90 percent of these loans were slotted17

17 Slotting or the slotting process refers to the identification and placement of borrowers into one of the 

11 categories.

into the “No Loss 

Mitigation Engagement” category. This category consists of 

borrowers where the servicer did not engage in a loan modification 

or other loss mitigation action. A little over 95 percent of these 

borrowers were paid $500-$600. As of April 6, 2017, all 

borrowers represented by the 24,239 loans had been mailed 

checks, with several being re-issued for various reasons, and 

19,720 loans (81 percent) had checks completely cashed18 totaling 

approximately $15.7 million. 

18 A loan with completely cashed checks is where a check or checks totaling the entire payment to the 

borrower or borrowers had been cashed. Some loans had multiple borrowers which necessitated the 

issuance of more than one check.

The remaining 4,519 loans have been closed after multiple 

attempts to contact the borrowers and the approximately 

$3.5 million in uncashed checks were escheated to the state of the 

borrower’s last known address. The same step is being taken with 

the remaining loans where borrowers have uncashed checks for the 

other OCC regulated servicers.

OCC Relied on Servicers to Validate the Universe of InScope Borrowers

OCC Relied on Servicers to Validate Borrower Categories, As Noted 

in Our Prior Audit of Amended Foreclosure Consent Orders

In January 2013, OCC provided servicers with instructions for 

slotting borrowers into 11 categories according to the most likely 

type of potential harm suffered as a result of the servicers’ 

foreclosure practices. The categorization was primarily a data 

driven exercise. In addition, OCC provided its examination teams 

with validation procedures to follow in order to gain reasonable 

 
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assurance of the accuracy of the servicers’ identification and 

categorization of the in-scope borrowers.

OCC officials told us that OCC headquarters personnel and resident 

examination team members maintained an ongoing dialogue with 

servicer personnel to address questions and concerns throughout 

the categorization process. We also learned that OCC primarily 

relied on the testing performed by the servicers’ independent 

consultants and/or internal audit groups to gain comfort in the 

slotting process and the resulting categorization. OCC officials told 

us that they also gained comfort through ongoing communications 

with the servicers’ personnel to address questions and concerns 

throughout the categorization process. This ongoing 

communication sometimes resulted in corrective actions by the 

servicers. We noted during our review of relevant documentation 

that OCC’s oversight of the categorization process for the five 

servicers included in the scope of this audit did not vary from the 

steps taken by OCC to verify the categorizing by the servicers 

reviewed in our prior audit of the amended foreclosure consent 

orders.

OCC examiners concluded that the categorizing of borrowers for 

the five servicers we reviewed was reasonably accurate or 

satisfactory. While we did not perform independent testing of the 

precision with which the loans were identified and categorized, we 

believe that OCC’s supervision of this process was reasonable and 

consistent.

All Checks Have Been Mailed to Borrowers for Servicers Reviewed

We reviewed the check mailing reports for the five servicers to 

determine if borrowers were appropriately sent checks. As of April 

2016, all checks for borrowers of OCC-regulated institutions have 

been mailed, including those reissued for various reasons. The only 

checks not reissued were those returned as undeliverable where 

the additional skip tracing19

19 Skip tracing is a term used to describe the process of locating a person’s whereabouts.

did not result in an updated address. 

Approximately 70 percent of the total checks issued have been 

cashed. The check status totals are as follows (as of dates were 

September 2016 for all servicers except CitiResidential which was

 
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as of July 2016 and EverBank which was as of May 2016 for 

Checks Paid and September 2016 for Checks Issued):

• Checks Issued – 1,483,908

• Checks Re-Issued – 412,757

• Checks Cashed – 1,048,205

We reviewed 5 of the 11 categories for 4 of the 5 servicers 

reviewed (Citibank, PNC, U.S. Bank, and Wells Fargo) to verify that 

the total number of borrowers in each of the categories matched 

the total borrowers for the corresponding loan classifications by 

Rust. We performed this test to gain reasonable assurance that 

borrowers in the “in-scope” population were properly placed and 

accounted for by Rust. The servicers’ categories and the Rust loan 

classifications were not a one-to-one relationship because Rust’s 

check mailing process required the data to be in a more granular 

format. Thus, one category equated to multiple corresponding Rust 

loan classifications. EverBank followed a slightly different 

categorization process and engaged a different paying agent, Epiq 

Class Action & Claims Solutions, Inc. (Epiq), to handle check 

mailing; therefore, our verification of EverBank’s data required the 

review of a different set of documents.

We noted one discrepancy during our comparison of OCC’s data to 

Rust’s data and that involved PNC’s reported totals for the 

Servicemembers Civil Relief Act20

20 The Servicemembers Civil Relief Act (Public Law 108 – 189; Dec. 2003) is a federal law that 

provides legal and property protections for military members while they are on active duty and less 

able to timely respond to and participate in proceedings. It covers a broad range of issues including 

rental agreements, security deposits, prepaid rent, eviction, installment contracts, credit card interest 

rates, mortgage interest rates, mortgage foreclosure, civil judicial proceedings, automobile leases, life 

insurance, health insurance and income tax payments. The types of relief provided under the law 

include: limitations on the rate of interest for debts incurred before military service; protection 

against default judgments, evictions, foreclosures, and repossessions of property; and the ability to 

terminate residential and automobile leases due to military orders.

(SCRA) 527 category. PNC’s 

independent consultant performed a limited review of the SCRA 

527 loans and identified 17 loans in the SCRA 527 1a category21

21 The SCRA 527 1a category applies only to rescinded or completed foreclosures where the servicer 

foreclosed on borrowers eligible for SCRA protection. If the foreclosure was completed, a borrower 

was eligible for a $125,000 payment. If the foreclosure was rescinded, a borrower was eligible for a 

$15,000 payment.

 
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($125,000 or $15,000 payment) and none for category 1b22

22 The SCRA 527 1b category applies to in process or completed foreclosures where the servicer 

charged servicemembers interest rates that exceed SCRA Section 527 limits. Servicemembers who 

were charged interest rates higher than limits allowed by SCRA Section 527 were eligible for 

payments of $300 or the amount overcharged and paid by the borrower, whichever is greater.

($300 

payment or the amount overcharged and paid by the borrower, 

whichever is greater). The discrepancy occurred when PNC 

reported these 17 SCRA 527 loans in category 1b while Rust’s 

data reported the 17 loans in category 1a. However, we found that 

these 17 SCRA 527 loans were appropriately reported by Rust in 

category 1a for payment purposes.

Also, we noted a difference of seven borrowers between 

EverBank’s borrower category totals submitted in early 2013 and 

its approved Consent Order Distribution Plan, submitted in late 

2013. The category totals populated the Distribution Plan and, 

therefore, should equal. OCC told us that the earlier total came 

from the draft settlement discussion and did not contain the final 

EverBank IFR loan-slotting or the final EverBank IFR in-scope 

population. EverBank’s totals have remained unchanged since the 

finalization of its Distribution Plan which we verified to EverBank’s 

subsequent check mailing report. 

Based on our review of the categories for those servicers selected 

for review, we are reasonably assured that in-scope borrowers 

were properly accounted for and were placed into the categories 

that most likely related to the type of potential financial harm 

suffered as a result of the servicers’ foreclosure practices.

OCC’s Process for Tracking and Vetting Questions, 

Complaints, and Appeals Was Reasonable

The borrower complaint process was comprised of several stages 

and the activities of each stage varied depending on the time 

period of the IFR initiative. The complaint process was managed 

collaboratively by Rust and OCC’s CAG team, each with distinctive 

responsibilities. OCC told us that from the inception of the IFR 

process in November 2011 through December 2012, Rust was 

primarily responsible for mailing Request for Review forms to the 

borrowers, collaborating with the independent consultants to 

 
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confirm borrowers’ in-scope or out-of-scope status, and 

coordinating with servicers and/or independent consultants in 

responding to consumer inquiries regarding such communication. 

OCC’s CAG team forwarded all pending mortgage-related CAG 

complaints in Remedy23

23 Remedy is an “off-the-shelf” call center application used to enter, store and track information related 

to consumer complaints involving financial institutions and provide access to documents related to 

consumer complaints; store institutional data; provide data for reporting purposes; provide the data 

used by banks and federal savings associations to resolve consumer complaints; and archive 

information related to cases.

, CAG’s complaint database, through

December 2012, to the servicers to confirm the borrowers’ inscope or out-of-scope status. Subsequently, all of the in-scope 

borrowers were notified that their CAG case would be closed and 

that their complaint would be reviewed under the IFR. The CAG 

letter also advised borrowers to contact CAG if they did not receive 

a response through the IFR process. 

OCC officials told us that after the settlement agreements between 

the servicers and OCC were signed in January 2013, borrowers 

were advised to contact Rust if they thought they might be eligible 

to receive payment under the IFR. Rust mailed postcards to inscope borrowers advising them of the new settlement agreement. 

In addition, OCC used other marketing campaigns and public 

service announcements to increase awareness of the IFR and the 

settlement agreement to potentially eligible borrowers.

If a borrower contacted Rust and was told they were not part of 

the in-scope population, Rust advised the borrower of their right to 

file a complaint with OCC’s CAG. Borrowers who were referred by 

Rust to CAG, or who called CAG directly, to complain that they 

should have been part of the in-scope population were advised to 

submit an online or written CAG complaint. Once received, these 

complaints were assigned a case number and logged into Remedy 

for tracking purposes. CAG would forward the complaint to the 

respective servicer for reply as to whether the borrower was inscope or out-of-scope. CAG reviewed the servicer’s responses and 

replied to borrowers using a resolution letter with the servicer’s 

response as the basis supporting their in-scope or out-of-scope

status. The borrower had the right to appeal this status through the 

CAG appeal process noted in the resolution letter. This letter 

directed the borrower to submit a written appeal identifying all 

 
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relevant or new facts that they believe were not considered in the 

initial review.

In cases where CAG disagreed with the servicer’s out-of-scope 

determination or where a borrower provided information on appeal 

that contradicted the servicer’s response, CAG would reach out to 

OCC’s Enforcement, Compliance and Supervision Office for 

additional assistance to resolve the issue. It was through a private 

citizen’s use of this appeal process that OCC discovered the 

CitiResidential portfolio, the catalyst for this audit, which should 

have been included in Citibank’s in-scope population.

In order to assess OCC’s complaint process from initiation to 

resolution, we requested that OCC query its Remedy database to 

identify borrowers who complained that they should have been 

included in the in-scope population. OCC was able to identify these 

complaints by searching the code “EWT” as this code was 

assigned to borrowers who specifically complained about their outof-scope status. EWT stands for Early Warning Tracking, a term 

used by OCC to track potential emerging issues or possible risk 

items. This query generated 100 hits for the five servicers under 

review.24

24 OCC identified a total of 327 “EWT” complaints for all servicers that related to the January 2013 

settlement with OCC.

OCC was not able to confirm that this number represents 

the entire universe of borrowers who raised this complaint, as there 

could only be one EWT code assigned per CAG complaint and each 

complaint could potentially have multiple related issues raised by 

the same consumer.

We reviewed 25 of the 100 cases to determine if the OCC 

complaint process was followed. We did not evaluate the adequacy 

of the resolutions. We selected cases from each of the five 

servicers. The breakdown of our selection of complaints by servicer 

is as follows:

 
Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers 

(OIG-18-046) Page 13

Servicer Number of Cases 

Identified

Number of Cases 

Reviewed

Citibank 25 8

EverBank 2 2

PNC 8 4

U.S. Bank 1 1

Wells Fargo 64 10

TOTALS 100 25

For the 25 cases, we reviewed borrowers’ complaint letters, OCC’s 

acknowledgement letters, servicer correspondence, and CAG notes 

contained in the Remedy database as of late June 2016. Of the 25 

cases reviewed, 9 resulted in an IFR payment, 14 were deemed as 

out-of-scope, and 2 were inconclusive as borrowers did not submit 

requested additional information. In all 25 cases, the borrower was 

notified of the complaint’s resolution or the need for additional 

information. The selected cases reviewed were opened between 

November 2012 and September 2014, and closed as late as 

November 2015. Of the 9 cases that resulted in remediation 

payments, 8 checks have cleared and 1 was voided, the funds of 

which were escheated to the state of the borrowers’ last known 

residence in June 2016. Although we were able to ascertain that 

the 25 selected cases were tracked in Remedy, and OCC and/or 

the servicer communicated with the borrower the results of their 

findings, we could not attest that all of the steps in the complaint 

process outlined above were followed as the cases reviewed did 

not necessarily process through each step (for example, if a 

complaint was deemed as out-of-scope and the borrower never 

appealed that decision, the case would not proceed to the next 

step in the complaint process). Because we used a non-statistical 

sampling technique to select the cases, we did not project the 

results of our testing to the total universe of cases with the code 

EWT.

We noted that several cases had multiple related case numbers 

which OCC officials explained occurs because each separate 

source for a complaint receives a new CAG case complaint number 

even if CAG has the same complaint from another source already in 

Remedy (same complaint, same borrower, different source). OCC 

has a process for assigning related case numbers and/or closing 
Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers 

(OIG-18-046) Page 14

related cases depending on the status of the original case when the 

related case is received.

We believe that OCC had an adequate process to handle 

complaints from borrowers as to their in-scope status.

OCC Provided Guidance to the Paying Agents in the Form 

of a Telephone Script for Processing Questions, 

Complaints, and Appeals

We reviewed the guidance that OCC provided to Rust and Epiq, the 

paying agents, regarding how they should process questions, 

complaints, and requests to appeal the determination of the inscope status. We also interviewed OCC officials to gather details of 

how such inquiries/complaints were handled from initiation through

resolution.

OCC provided guidance to Rust and Epiq in the form of a telephone 

script. The script was broken down into 16 sections; each section 

containing a group of questions and answers specific to that topic. 

According to OCC, this script was a living document adopted by 

both OCC and the Board, and used by Rust’s and Epiq’s customer 

service representatives, “in-takers”, to address inquiries received 

from borrowers and/or stakeholders during the IFR process. It was 

updated periodically as new issues arose that warranted 

modifications to the document. If inquiries were beyond the scope 

of the prescribed questions/answers, the issues were either 

escalated to the next level of supervision or the caller was given 

OCC CAG’s website for further assistance with resolving their 

issue. 

Based on our review of the telephone script guidance and 

interviews with OCC officials, we believe the guidance provided by 

OCC was useful in helping the Rust and Epiq customer service 

representatives resolve issues raised by borrowers and/or 

stakeholders. 
Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers 

(OIG-18-046) Page 15

OCC Monitored the Identification of In-Scope Borrowers

and Noted Concerns, and Corrective Actions Were Taken 

by the Servicers 

We reviewed OCC’s validation of the servicers’ identification of inscope borrowers and their respective category documentation to 

determine what data gaps may have existed within the servicers’ 

systems that made it difficult to identify in-scope borrowers and 

what, if any, corrective actions were taken. We found that all 

servicers reviewed by OCC identified data gaps and/or system 

issues during the categorization process and took corrective actions 

to mitigate those issues. Two examples of such issues are:

• One servicer identified an issue with the bankruptcy 

category whereby the bankruptcy end date was not 

consistently populated in the system. The missing date led 

to an overstatement of borrowers for this category. The 

servicer corrected the issue by changing the bankruptcy 

logic to assume an end date in the future (e.g. 1/1/3000), 

for those cases with missing end dates.

• Another servicer identified an issue with the Denied 

Modification category. The system of record did not hold 

fields for systemically recording Loan Modification Denials 

until May 2012. Consequently, this issue was identified 

during the validation of the In-Scope population. The servicer 

used ad-hoc spreadsheets to identify as many of these loans 

as possible.

Conclusion

Based on our inquires and review, we found that OCC took 

immediate action to determine the total borrowers omitted from 

Citibank’s in-scope population once the error was discovered and 

ensured checks were mailed to the affected borrowers in 

accordance with the IFR payment agreement. We found that OCC’s 

process for determining the in-scope population of borrowers was 

reasonable and consistent with the process reviewed in our prior 

audit of the amended consent orders. We also found that OCC had 

a borrower complaint process that sought to address borrowers’ 

concerns regarding their in-scope status in a reasonable manner.

Further, we found that all servicers reviewed by OCC identified 
Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers 

(OIG-18-046) Page 16

data gaps and/or system integration issues and took corrective 

actions to mitigate those issues.

We are not making any recommendations to OCC as a result of our 

audit. We provided a draft of this report to OCC management. OCC 

reviewed the report and had no comments.

* * * * * 

We appreciate the courtesies and cooperation provided to our staff 

during the audit. If you wish to discuss the report, you may 

contact me at (202) 927-0384 or Andrew Morgan, Audit Manager, 

at (202) 927-8121. Major contributors to this report are listed in 

appendix 4. A distribution list for this report is provided in appendix 

5.

/s/

Jeffrey Dye 

Audit Director
Appendix 1

Request to Treasury OIG for Report on Circumstances Surrounding Citibank’s 

Exclusion of In-Scope Borrowers

Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers 

(OIG-18-046) Page 17
Appendix 1

Request to Treasury OIG for Report on Circumstances Surrounding Citibank’s 

Exclusion of In-Scope Borrowers

Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers 

(OIG-18-046) Page 18
Appendix 2

Objectives, Scope, and Methodology

Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers 

(OIG-18-046) Page 19

Consistent with the request of the Ranking Member of the House 

Committee on Financial Services, our objectives were to determine:

(1) the facts and circumstances surrounding the increase in the 

population of Citibank, N.A.’s (hereinafter Citibank) in-scope 

borrowers25

25 In-scope borrowers refers to borrowers eligible for payment under the Independent Foreclosure 

Review process whose homes were in any stage of the foreclosure process in 2009 or 2010.

; (2) the methodology used and procedures performed 

by the Office of the Comptroller of the Currency (OCC) to test and 

validate the universe of in-scope borrowers and whether such 

borrowers were appropriately sent checks for the five servicers26

26 Servicers refers to mortgage servicers who entered into consent order agreements with the OCC, the 

former Office of Thrift Supervision, and the Board of Governors of the Federal Reserve System for 

unsafe and unsound practices in residential mortgage servicing and foreclosure processing.

not covered in prior Office of Inspector General (OIG) reviews 

(Citibank; PNC Bank, N.A. (PNC); U.S. Bank, N.A. and U.S. Bank, 

N.A., ND (collectively U.S. Bank); Wells Fargo Bank, N.A. (Wells 

Fargo); and EverBank); (3) OCC’s process for vetting any individual 

questions, complaints, or requests for appeal related to the inscope population from borrowers; (4) any direction that OCC has 

provided to servicers outlining how the servicer should process 

questions, complaints, or requests to appeal the determination of 

the in-scope population that they receive from borrowers; and (5) 

what data gaps existed within servicers’ systems that made it 

difficult to identify in-scope borrowers and whether such data gaps 

or system integration issues have been fixed.

To accomplish these objectives, we took the following actions: 

• Interviewed OCC officials, including the Deputy Comptroller 

of Large Bank Supervision, Senior Deputy Comptroller for 

Enterprise Governance and Ombudsman, Deputy Chief 

Counsel, Assistant Director of Enforcement and Compliance, 

Counsel for Enforcement and Compliance, and Director of 

the Customer Assistance Group (CAG) to gain an 

understanding of the (1) facts and circumstances 

surrounding Citibank’s omission of borrowers from its initial 

determination of the in-scope population; (2) methodology 

used to test and validate the population of borrowers for the 

five servicers not covered in our prior report on amended 

consent orders entitled OCC Needs to Ensure Servicers 

Implement Amended Foreclosure Consent Orders and Act on 

 
Appendix 2

Objectives, Scope, and Methodology

Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers

(OIG-18-046) Page 20

Identified Weaknesses (OIG-14-044; August 6, 2014);

(3) process for vetting any individual questions, complaints, 

or requests for appeal related to in-scope population from 

borrowers; and (4) guidance provided to servicers for 

handling such inquiries.

• Selected a sample of 5 out of 11 in-scope borrower 

categories for 4 of the 5 servicers reviewed (Citibank, PNC, 

U.S. Bank, and Wells Fargo) to verify that the total number 

of borrowers in each of the categories matched the total 

borrowers for the corresponding loan classifications by Rust 

Consulting, Incorporated. EverBank followed a slightly 

different categorization process than the other servicers 

reviewed therefore, we reviewed EverBank’s Waterfall 

Report and reconciled it to the Consent Order Distribution 

Plan and to subsequent check mailing reports to verify the 

categorization process followed by EverBank. The sample 

selected was non-statistical. Non-statistical sample results

were not projected to the total universe.

• Reviewed documentation of OCC’s validation of the 

servicer’s identification of in-scope borrowers and their 

respective category documentation to determine what data 

gaps may have existed within the servicers’ systems and if 

any corrective actions were taken.

• Reviewed the guidance (Telephone Script) that OCC 

provided to Rust Consulting, Incorporated (Rust) and Epiq 

Class Action & Claims Solutions, Inc. (Epiq), the paying 

agents, regarding how they should process questions, 

complaints and requests to appeal the determination of the 

in-scope status. We also interviewed OCC officials to gather 

details of how such inquiries/complaints were handled from 

initiation to resolution.

• Sampled and reviewed 25 of the 100 population of cases 

generated through a query of OCC’s Remedy database for 

the five servicers under review (Citibank, EverBank, PNC, 

U.S. Bank, and Wells Fargo), to determine if the OCC’s

complaint process was followed. We reviewed borrowers’ 

complaint letters, OCC’s acknowledgement letters, servicer
Appendix 2

Objectives, Scope, and Methodology

Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers

(OIG-18-046) Page 21

correspondence, and CAG notes contained in the Remedy 

database as of late June 2016. The sample selected was 

non-statistical. Non-statistical sample results were not 

projected to the total universe.

• Reviewed the paying agents’ (Rust and Epiq) check mailing 

reports for the five servicers under review to determine if 

borrowers were appropriately sent checks.

We performed our audit fieldwork from April 2015 through July 

2016 with subsequent follow up made from January 2017 to April 

2017.

We conducted this performance audit in accordance with generally 

accepted government auditing standards. Those standards require 

that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the

evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix 3

Management Response

Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers

(OIG-18-046) Page 22
Appendix 4

Major Contributors to This Report

Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers

(OIG-18-046) Page 23

Andrew Morgan, Audit Manager

Vicki Preston, Audit Manager

Adelia Gonzales, Auditor

Virginia Shirley, Program Analyst

Angela Brice, Auditor

Kevin Guishard, Referencer
Appendix 5

Report Distribution

Review of Circumstances Surrounding Citibank’s Exclusion of In-Scope Borrowers 

(OIG-18-046) Page 24

Department of the Treasury

Counselor to the Secretary 

Office of Strategic Planning and Performance Improvement

Office of the Deputy Chief Financial Officer, Risk and Control 

Group

Office of the Comptroller of the Currency

Comptroller of the Currency

Liaison Officer

Office of Management and Budget

OIG Budget Examiner

United States Senate

Chairman and Ranking Member

Committee on Banking, Housing, and Urban Affairs 

Chairman and Ranking Member

Committee on Finance

U.S. House of Representatives

Chairman and Ranking Member

Committee on Financial Services
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