The FDIC released a special foreclosure edition of its Supervisory Insights journal series Wednesday.

The FDIC says the report highlights “lessons learned” from the interagency review of processes and procedures at the nation’s 14 largest residential mortgage servicers, which was prompted by the robo-signing issues that surfaced last fall.

This regulatory probe resulted in consent orders with all 14 servicers, as well as two firms that provide foreclosure-related services to the industry.

The FDIC explained that these consent orders are intended to remedy the “unsafe or unsound practices” identified by the regulatory investigation, namely “lax foreclosure documentation, ineffective controls over foreclosure procedures, and deficient loss mitigation procedures and controls.”

The federal agency says it recognizes that residential foreclosures have “increased dramatically” since 2006 and that the sheer volume of foreclosures falling on the top servicers resulted in their “failure to properly manage the servicing process.”

Many institutions failed to commit the resources needed to handle the rapidly growing volume of mortgage loans in default or at risk of default, the FDIC said in its report. In addition, the agency says weak governance and controls increased legal, reputational, operational, and financial risks while creating unnecessary confusion for borrowers.

According to the FDIC’s report, the problems uncovered are principally isolated to the largest servicers.

“Most federally insured depository institutions that owned or serviced residential real estate loans during this time have been affected by this dramatic increase [in foreclosures], but the delinquency rates on loans originated by community banks have been far lower than at the nation’s largest institutions,” the FDIC stated.

“In fact, the top 14 servicers were responsible for processing the vast majority of foreclosures. Servicing problems also have been more common at large institutions,” the agency said.

As the primary federal regulator of state nonmember banks, which collectively service less than four percent of residential mortgages, the FDIC says it has been reviewing and conducting targeted exams to determine whether any of these institutions have engaged in the types of practices identified at the major servicers.

“To date, the review has not identified ‘robo-signing’ or any other deficiencies that would warrant formal enforcement actions,” the FDIC stated.

The federal agency says though it “has not identified serious industry wide problems among state nonmember banks, the well-publicized problems of large servicers, combined with growing litigation over ‘robo-signing’ ... indicates that community banks should promptly review their servicing practices.”

The FDIC’s full report can be accessed online