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Sat Feb 16, 2013, 10:02 AM

Obama Administration Asks Banks to Regulate Their Own Foreclosure Abuses

Having bungled the so-called independent review of foreclosure mistakes, the Obama administration has now decided that the best way to help homeowners is to have the banks—which were responsible for the foreclosure errors—examine the case files and decide how best to fix the situation.

In January, the Office of the Comptroller of the Currency (OCC) shut down the foreclosure review by independent consultants—which had already cost about $2 billion— after it was revealed that the banks had selected said consultants. The process also proved to be taking too long to resolve homeowner grievances, so the administration decided to reach a $3.6 billion settlement with the banks.

But before the money can be distributed to individuals wronged during the foreclosure crisis, more than four million cases need to be reviewed. Instead of federal regulators doing the work, they are trusting the financial institutions, including Bank of America and Wells Fargo, to do it properly this time.

Housing advocates, not surprisingly, are worried the banks will shortchange homeowners while they scrutinize their earlier mistakes. “The whole process has been a slap in the face to homeowners and a slap on the wrist to banks,” Isaac Simon Hodes, an organizer with Massachusetts-based Lynn United for Change, told The New York Times. “The latest development shows how there has been no accountability.”

http://www.allgov.com/news/top-stories/obama-administration-asks-banks-to-regulate-their-own-foreclosure-abuses-130215?news=847076

20 replies, 1147 views

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Reply Obama Administration Asks Banks to Regulate Their Own Foreclosure Abuses (Original post)
The Straight Story Feb 2013 OP
forestpath Feb 2013 #1
woo me with science Feb 2013 #2
Angry Dragon Feb 2013 #3
The Straight Story Feb 2013 #5
magellan Feb 2013 #4
City Lights Feb 2013 #6
ananda Feb 2013 #7
Enrique Feb 2013 #8
ProSense Feb 2013 #9
Baitball Blogger Feb 2013 #10
amandabeech Feb 2013 #19
woo me with science Feb 2013 #11
woo me with science Feb 2013 #12
liberal_at_heart Feb 2013 #13
forestpath Feb 2013 #14
woo me with science Feb 2013 #15
TheKentuckian Feb 2013 #16
L0oniX Feb 2013 #17
woo me with science Feb 2013 #18
alp227 Feb 2013 #20

Response to The Straight Story (Original post)

Sat Feb 16, 2013, 10:05 AM

1. The Obama administration is in the banks' pockets. They will NEVER stand up for homeowners.

 

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Response to The Straight Story (Original post)

Sat Feb 16, 2013, 10:07 AM

2. Gee, what a shock.

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Response to The Straight Story (Original post)

Sat Feb 16, 2013, 10:09 AM

3. I would have sworn that this was going to be Onion

I suppose we should have killers be their own jury and everything will work out .........


I sit here shaking my head

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Response to Angry Dragon (Reply #3)

Sat Feb 16, 2013, 10:13 AM

5. Maybe on DU we could be our own jury for posts we make

I would probably have less hidden that way

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Response to The Straight Story (Original post)

Sat Feb 16, 2013, 10:13 AM

4. They're ASKING the banks to regulate their abuses?

Gee, what a great idea! I'm going to try that next time someone breaks into my home and starts stealing things.

"Please, I'd really appreciate it if you didn't take quite so much...."

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Response to The Straight Story (Original post)

Sat Feb 16, 2013, 10:15 AM

6. Yes, let's have mortgage corporations police themselves.

Nothing could go wrong, right?

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Response to The Straight Story (Original post)

Sat Feb 16, 2013, 10:21 AM

7. When is this softness to corporations going to end?

Sickmaking.

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Response to The Straight Story (Original post)

Sat Feb 16, 2013, 10:24 AM

8. "bungled"

bungled like a fox.

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Response to The Straight Story (Original post)

Sat Feb 16, 2013, 10:24 AM

9. The process needed to be shut down

Thomas Curry, head of the OCC since 2012 (it had an acting head since 2010), was the person Senator Warren addressed in the banking hearing. The process was costly and ineffective.

To accelerate the payments, the comptroller’s office decided to cut out the middlemen, the consultants, from the reviews. In a conference call last week, the government outlined a plan to use the lenders instead, according to people with direct knowledge of the discussion. Banks will now have to assess each loan for potential errors, which will help determine the size of the payments to homeowners.

<...>

Despite billing for roughly $2 billion in fees in the 14-month review, consultants examined only a sliver of the 500,000 complaints filed by homeowners, people involved in the matter said. Their efforts were stymied, in part, because regulators urged consultants to first scrutinize a random sample of the four million foreclosures before digging into specific homeowner complaints, the people involved said. The decision, the people said, may have undercut the scope of the settlement and potentially deprived homeowners of additional relief.

Consultants were also criticized for a faulty review process.

Some consulting firms, including the Promontory Financial Group, farmed out much of the work to contract employees. Others faced questions about their objectivity. The consultants, critics note, were paid billions of dollars by the same banks they were expected to police.

Some consultants say they sounded repeated alarms about the process. Last spring, a group of consulting firm executives met with comptroller officials in Washington to voice concerns that the reviews were too narrow, according to people with direct knowledge of the meetings....The review process, with its narrow focus, was created by the comptroller’s office in 2011, under previous leadership.

http://dealbook.nytimes.com/2013/02/12/big-banks-are-told-to-review-their-own-foreclosures/

When regulating agencies don't do their jobs, it really screws things up.

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Response to The Straight Story (Original post)

Sat Feb 16, 2013, 10:27 AM

10. Assuming this is true, this is a lawyer's response.

Lawyers love to self-regulate. Which is why our world is so screwed up today.

Just a theory.

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Response to Baitball Blogger (Reply #10)

Sat Feb 23, 2013, 01:11 AM

19. Lawyer's clients want to self-regulate.

Lawyers would probably rather than the government regulate, because then the lawyers would be called in to represent clients before the governmental regulators. That means more fees for the lawyers.

If the banks regulate themselves, even under federal statutes, it would mean less money for the lawyers.

Now, lawyers who advocate self-regulation are doing so because they're getting a hefty fee for their lobbying work.

For lawyers, its about the fee.

Always.

Take it from an ex-lawyer.

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Response to The Straight Story (Original post)

Sun Feb 17, 2013, 12:15 PM

13. par for the course

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Response to The Straight Story (Original post)

Sun Feb 17, 2013, 12:25 PM

14. Surprised Obama's DOJ doesn't throw the homeowners in jail for daring to make the banks look bad.

 

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Response to The Straight Story (Original post)

Sun Feb 17, 2013, 02:07 PM

16. A uniquely TeaPubliKlan solution!

No longer unique but still less than worthless and Orwellian in concept.

Plus, the failure was willfully weaved into the fabric, there always are enough gremlins to screw up the works, you don't let the regulated choose their regulators to be sure it goes off the rails.

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Response to The Straight Story (Original post)

Sun Feb 17, 2013, 02:46 PM

17. US justice is a joke! n/t

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Response to The Straight Story (Original post)

Sat Feb 23, 2013, 03:09 AM

20. The prisoners run the penitentiary once again. n/t

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