Elizabeth Warren Questions the End of the Mortgage Foreclosure Review Process
The various mega-settlements reached recently by leading mortgage servicers were costly for them, but they also terminated the independent foreclosure review process that was established under consent orders issued by federal banking regulators in 2011 with 14 mortgage servicers related to their residential mortgage servicing and foreclosure processing – and Massachusetts Senator Elizabeth Warren and Maryland Congressman Elijah E. Cummings are raising questions about that.
In a letter to Federal Reserve Chairman Ben Bernanke and Comptroller of the Currency Thomas Curry, they are seeking documents relating to the settlement.
“We believe that public confidence in the settlement – the confidence necessary to speed recovery of the housing markets – will exist only if the OCC and the Federal Reserve provide additional transparency into the process used and information gathered during the Independent Foreclosure Review process,” wrote Warren and Cummings. “It is critical that the OCC and the Federal Reserve disclose additional information about the scope of the harms found to establish confidence in the sufficiency and integrity of the settlement.”
Warren and Cummings requested documents and information including:
• The results of all IFR performance reviews by the Federal Reserve or the OCC, including all documents reviewing the performance of each of the independent contractors that conducted reviews of borrower files under the terms of the consent orders issued in April 2011;
• All documents compiled by the Federal Reserve or the OCC indicating the total amount of settlement funds paid to each independent contractor; and
• The total number of reviews of borrower files initiated by each of the independent contractors, and the number of borrower files in which unsafe or unsound practices were found.
There undoubtedly will be more on this issue in the near future.