Thu Feb 14, 2013, 12:39 AM
Fire Walk With Me (38,893 posts)
Regulator Explains Decision to End Flawed Foreclosure Review
Carlos, Occupy Fights Foreclosures says:
This so called Independent review was a failure from the beginning. It was nothing but a smoke screen to again "cover up" all the crimes by the banks. There was nothing independent of the review. During 2009-2010 millions lost their homes, it was one of the worse years and many of them as a direct result of the pre-meditated, well constructed system that they knew it would fail. One of the primary players was Angelo Mozillo and we know what happen with him and how his son now is enriching himself by selling the same foreclosed homes to investors with the system that his father created. Countrywide was one of the biggest contributors to the 2009-2010 crisis and as Bank of America bought them they have continued to participate in the same practices that Countrywide was running. Many of the homeowners that qualified for the so called review have been denied because of all the corruption that the documents have."
A top regulator shed light Wednesday on his decision to scuttle an independent review of bank foreclosures, portraying the flawed process as a boon to outside consultants and a barren maze for homeowners.
At a luncheon speech in Washington, Thomas J. Curry, the comptroller of the currency, outlined the shifting stages of the independent foreclosure review. The process began in 2011 when regulators accused banks and other loan servicers of shoddy foreclosure practices.
Mr. Curry, who took over the comptroller’s office several months after the review started, argued that homeowners languished without payment as the review suffered from delays. The independent consultants that banks hired to run the 14-month review, however, racked up some $2 billion in charges.
“It just doesn’t make sense for these servicers to continue funneling money to consultants that could be better used to help distressed borrowers who have lost their homes,” according to a copy of his written remarks before the Women in Housing and Finance group.
(More at the link.)
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Regulator Explains Decision to End Flawed Foreclosure Review (Original post)
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Response to Fire Walk With Me (Original post)
Thu Feb 14, 2013, 11:36 AM
hay rick (3,751 posts)
1. The good, the bad, and the ugly.
Thanks for posting this story. From the article:
Mr. Curry recalled a pivotal moment in November 2012 that came as he reviewed the consultants’ compensation. He detected a stunning contrast with their $2 billion payday: “We were still not ready to compensate the first borrower,” he said.
The comptroller’s office, he said, “came to the realization that maintaining our course would significantly delay compensation without appreciable benefit to the affected borrowers. I decided we needed to change direction.” The Federal Reserve, which also oversaw the review, agreed.
The regulators instead opted to strike a multibillion-dollar settlement with the nation’s largest banks, ordering them to make $3.6 billion in cash payments to homeowners. Regulators expect to dole out the first payments to homeowners in late March.
To accelerate the payments, the comptroller’s office decided to cut the consultants out altogether. Instead, according to people involved in the process, regulators are turning to the banks for help. The banks will now have to assess each loan for potential errors, which will help determine the size of the payments to homeowners.
The article goes on to point out that, under the terms of the agreement, "...banks have already agreed to pay a fixed amount to homeowners, regardless of what they find in the loan files."
Recap: Price Waterhouse et al skimmed $2 billion from the foreclosure crisis without one thin dime going to home owners before the comptroller's office shut down the foreclosure review process. The banks were paying the consultants to do the reviews. It sounds like they got exactly what they paid for.
The new agreement apparently caps both the banks' liabilities and homeowners' recovery payments, and puts the banks in charge of reviewing their own practices...
Rust never sleeps. The ethos and culture of looting is endemic to our financial system. The consultant scam is replaced by the consent agreement/self-policing scam and the plundering continues unchecked.