Democrats Fight Regulators' Refusal to Release Foreclosure Reviews

Democrats Fight Regulators' Refusal to Release Foreclosure Reviews
Sen. Elizabeth Warren, D-Massachusetts.

A standoff has developed between a group of Democratic lawmakers and bank regulators over the release of shelved results from the Independent Foreclosure Review, which yielded a blanket $9.3 billion settlement — minus any details as to the extent of  wrongdoing by mortgage servicers.
The lawmakers have sent a letter to Federal Reserve Chairman Ben Bernanke and Comptroller of the Currency Thomas Curry, challenging the decision by their staff not to provide any documents from the scuttled reviews.
Staff from the regulatory agencies claimed these documents are the “trade secrets” of mortgage servicing companies and should be withheld even from members of Congress.
The reason given by the regulators, according to the lawmakers:  releasing the documents can be interpreted as a waiver of  regulatory authority to withhold proprietary business information from the public.
The letter to the regulators came from Sen. Elizabeth Warren, D-Massachusetts, a member of the Senate Committee on Banking, Housing and Urban Affairs, and Rep. Elijah E. Cummings, D-Maryland, ranking member of the House Committee on Oversight and Government Reform.
In the letter, dated April 10, Warren and Cummings write: “As regulators, you identified systemic and widespread abuses two years ago, and concealing important information about these violations limits our ability to fulfill our responsibility to conduct oversight over the actions of mortgage servicing companies and to develop legislation to protect our constituents from further abuse.”
The initial request from Warren and Cummings on January 31, 2013 sought the detailed results of the Independent Foreclosure Review, “such as the number of improper foreclosures, the amount of inflated fees, or the extent of abusive practices by each mortgage servicer.”
On Tuesday, the regulators’ staff refused to provide any documents that would identify wrongdoing by any specific bank, Warren and Cummings said.
The latest letter from the lawmakers calls this decision a “mistake.”
The April 10 letter: “We strongly believe that documents should not be withheld from any Member of Congress based on the flawed argument that illegal activity by banks is somehow their proprietary business information.  Breaking the law is not a corporate trade secret.”
Meanwhile, at a hearing before the Senate Banking Committee Thursday, Warren and Sen. Sherrod Brown, D-Ohio, were clearly unhappy with the answers lawmakers received about the program during heated questioning of Daniel P. Stipano, deputy chief counsel, Office of the Comptroller of the Currency, and Richard Ashton, deputy general counsel, Board of Governors of the Federal Reserve.
Warren, a longtime consumer advocate before running for the Senate, asked many of her questions about the January settlement ending the foreclosure reviews for 13 mortgages servicers, including the largest U.S. banks. That agreement will start paying out $3.6 billion in checks to nearly 4 million homeowners Friday as compensation for shoddy or wrongful foreclosures in 2009 or 2010. More than a half-million or so applied for a foreclosure review with a specific complaint. But most borrowers will receive less than $1,000 each.
“If you had believed that the banks had broken the law in 90 percent of cases, would you have settled for more money?” Warren asked Ashton, a top lawyer at the Fed. “Doesn’t it matter how many homeowners were victims of illegal activities by their bank?”
“Our priority was to get cash to borrowers,” Ashton responded.
Read More on the Independent Foreclosure Review:
»» Payout Disparity: Many Who Requested Reviews Getting Twice as Much
»» Lawmakers Seek Updates on Foreclosure Payouts, Other Assistance

»» Foreclosure Review Payouts: Most are in $500 to $6,000 Range

13 thoughts on “Democrats Fight Regulators' Refusal to Release Foreclosure Reviews

  • April 15, 2013 at 3:17 pm

    What upsets me is the fact that Rust consulting can send out a postcard to everyone saying payout will be between $500-$125,000. Now, we will be lucky we get $300. Why was a framework posted showing higher amounts, now a new framework is posted. I am all for the class action lawsuit.

  • April 15, 2013 at 5:23 pm

    I agree Cindy. I believe that when the original framework was released, the fraud was fresh on the minds of the government entities policing it. Now that the settlement has been made, the mortgage companies are back in charge, and THEY, THE IDIOT A$$ CRIMINALS THAT THEY ARE, will now get to decide how much to pay, and when. Even the original framework only scratched the surface of what people deserve. Now, it’s even less. They can keep mine. When I originally signed up for the review, I thought that there might be an infinitesimal shred of honor left in this country. Now, as usual, it has turned into something that would resemble a kindergarten school project, filled with bumbling, and retarded law makers not knowing their own names.

  • April 16, 2013 at 6:56 am

    I am an active duty Marine that was foreclosed on in 2009. This is after being overseas and submitting 2 loan modification request that both did not get answered. After using our life savings to stay afloat and pay the mortgage I was forced to file chapter 7 bankruptcy. I almost lost my family at the same time. The fact that the government got involved is great but on the other hand the banks did not take the government serious in any way. Today I recieved a check for 600 dollars. This is a great slap in the face for them violating the law that says not to foreclose on active duty military. And yet they do these things and get away with it. Us the peasants of the country would have been thrown in prison for not paying or share. We are taxed on our pay then we pay taxes on purchases at the store. Then pay taxes at the end of the year. All this to still be treated like the lowest things imagined.

  • April 16, 2013 at 9:34 am

    I haven’t recieved a check yet. I am one of the 53 foreclosed on who was not in default and one of the 2800 original cases reviewed by the OCC in 2010. I am also one of 250 borrowers complaints reviewed by 39 state attorney generals in 2009 which was posted on the internet April 29,2009. Check it out (AG’s Take Action on CWN Reports of Foreclosure Abuse). Nothing was done to stop what happened to us by any of them. Our home was sold October 5,2011 to my home church who tore it down to build a life center. We had one of the first internet post August 15, 2008 concerning servicers under (Countrywide Cashing in on Surprising Group of Homeowners | The Consumer Warning Network). The OCC, Louisiana Attorney General and Louisiana Office of Financial Institutions all had these internet post and over 50 pages of evidence concerning our complaints and did nothing. I filed a complaint directly to the OCC 11-28-2011 and was given Case #01887017. I also filed for review of my foreclosure in the Independant

  • April 16, 2013 at 11:32 am

    I signed up for the class action lawsuit. We all need to take these idiots down.

  • April 16, 2013 at 1:06 pm

    Have not received check yet but whats the point? Checks are not being cashed for insufficient funds! Lmao! Whatelse is new? My question is how do they know what catagory u should be in if it wasnt reviewed? Also the 2 billion they spent on rust to do reviews should refund for not completing the job! I was in bankruptcy and a month later boa foreclosed on me and i didnt even get a notice! Once a week a guy would come and take pictures of my home and i asked him why he was there? And he never answered just ask me if i was still living there? Duh did he think i just set up house? My original loan was countrywide and i assume it was sold to boa without my knowledge! I should get 62,500 but i just want my money back for atty and the payments i made to bank and trustee that they kept while foreclosing on me! Not 300.00! I will use the 300 to get in on class action suit!

  • April 21, 2013 at 12:26 pm

    I was not in default when I applied for the HAMP program. I lived in Port St Lucie FL, during the boom years. We were the fastest growing city for several years and mecca of shady loan approvals, I mean “no-doc” loans. Over 30% of our city is in foreclosure, Our local government backed over 1 billion in bonds for the exchange of 500 jobs! HA! One of them Digital Domain declared bankruptcy. Now the state of FL is out $20m and city of PSL is out $50M – And there are many more foreclosures to come!
    2006 in a blue collar city, for the 1st time I saw mortgage brokers, realtors, and local bankers driving in Hummers and Lotus’s. At one point I actually got my mortgage’s license. I quit before I could push through my 1st loan. I knew in my heart the couple applying for the refi could not afford the new payments. The wife was pregnant (2nd kid) and they needed her income to qualify. She flat out told me she was quitting once they got the money, I could not ethically process the loan or even face them down the road, so wished them the best of luck and ended my career as a mortgage broker.
    As a result of poor employment options in my city I bought a retail B2B franchise system. I ran the business for 3 yrs out of my home and later moved into a retail location. Business was great until everyone adjustable mortgages set in. In 1 year nearly 30% of my customers moved out of town and many began to signs of suffering too. I closed 3 years ago. Out of a customer base of 1200 only 50 mom and pops survived.
    To save money I applied for the new HAMP program to lower my rate from 5.5 to 2% (stupid I know). I was current on my mortgage and aside from some late credit cards (business issues) my credit was decent. That next month I made 1/2 my house note on the 1st and the 2nd half on the 15th (this was not the 1st time). That action alone placed me in default, 3 months later I was served with papers, the suit also added on 60k in fees (I assume-still don’t know). They sued me for more than my original 8 yr old note. I filed for bankruptcy. I wanted my home and it was the only lawful alternative that could offer me protection. I completed 2 sets of trial payments, both denied. One time the bank cut up the check and mailed it back saying it was “destroyed once it got here” One month later I was given an auction sale date of my home in a different county. At that point I retained a 2nd attorney solely to deal with the bank. He did get a us HAMP approval.
    I am very fortunate to be in my home. I’m grateful beyond belief, especially because it nearly destroyed my family. What depress me the most is my blue collar town went from Hummers to Homeless. Pamphlets can be found in every school for displaced children on “how to cope” with foreclosure. If this is the American Dream and this is how our government protects us, we’re in big trouble!
    In the end the banks destroyed my loan numbers and assigned new ones. I tried to apply for the Independent Foreclosure Review with Rust 2x’s and both times I was told I was not eligible cause my file number could not be found. I received the post card and I agree that this is a joke.
    I’m all for a class action and I have every bit of documentation!

  • April 21, 2013 at 1:43 pm

    RG Wow I am you kept your home.

  • April 26, 2013 at 11:33 am


  • May 1, 2013 at 8:50 pm

    We paid more than 10 years of our home, $900 dollars per month, with an interest of 7.85% percent. Wells Fargo took our home and sold it to someone else for 80K. Now, we received a check for $2,000. What do we have to do? We should all band together and sue them all!! The government, rust consulting and the banks, but we all have to unite, all of us who were duped and go out and protest, for our rights!! It’s a misery how little they pay for how tremendous they scam all of us out of our very pockets. Most of us lost our homes very unfairly and without help from these banksters. What else do we have to lose? What they have done is an insult to all of us and our families. It’s time they paid their true dues to us, we want our money back with a guarantee with what they stole from us!

  • May 1, 2013 at 8:52 pm

    Oh, and the bank never helped us lower our interest rates when they could have, no help whatsoever. So, this is all justifiable for all of us to have the greatest of reason to fight back and sue them.

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