Foreclosure Review Fiasco: We Were Told to 'Not Report What We Saw'

Foreclosure Review Fiasco: We Were 'Told Not to Report What We Saw'The Independent Foreclosure Review, an effort launched 20 months ago to correct the wrongs against millions of Americans, was such a failure on so many levels that it had to be scrapped, according to new revelations by The Huffington Post.
The audits of foreclosure actions taken in 2009 and 2010 has now become an $8.5 billion settlement with 10 banks, U.S. regulators announced last week. The deal stems from the April 2011 enforcement actions against the banks for “deficient practices in mortgage loan servicing and foreclosure processing,” some of which resulted in wrongful evictions.
About 4 million borrowers affected will share $3.5 billion in compensation, with payouts ranging from $250 to $125,000 in the most serious cases. The remaining $5 billion would fund loan modifications and other homeowner assistance.
As part of the original review, banks hired “independent” consulting firms to work with contract employees at the banks to conduct exhausting audits of foreclosure paperwork. These contractors, some of which spoke to the Huffington Post, relayed accounts of confusion in an atmosphere where bank managers instructed the contractors not to believe their eyes when it came to bank-caused mistakes.
“We knew what we were looking at,” one employee told The Huffington Post. “But we were told under threat of losing our jobs to not report what we saw.”
Observers of the program told The Huffington Post and others  that the decision to end the reviews amounted to an admission that the Independent Foreclosure Review, “which had cost billions of dollars and one year of intense work, was too broken to save.”
The HuffPost writes: “Had the reviews continued, insiders note, they would have produced results compromised by systemic mistakes and errors made along the way by the contract employees at banks and at the auditors.”
In one example noted by the Post, contract employees at Bank of America were told to answer more than 2,000 questions written by the consulting firm the bank hired to audit its mortgage loan files.
“Those questions, the contractors said, were confusing and open to interpretation,” the Post writes.
Read the HuffPost article.

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