Daily Archives: February 13, 2013


Last month, the Office of the Comptroller of the Currency scuttled the foreclosurereview by independent consultants because it was marred by delays and inefficiency. Instead, the regulator struck a multibillion-dollar settlement directly with the nation’s largest banks, a deal that includes $3.6 billion in payments to aggrieved homeowners.

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.

The decision to tap the banks for support is the latest twist in the review of more than four million foreclosures, a process that has incensed lawmakers and ensnared the nation’s largest lenders. Regulators are eager to make the payments to homeowners, who have languished for more than a year.

In 2012, housing advocates, regulators and some bank executives suggested the government release an initial round of payments to homeowners, people briefed on the matter said. Such a move might have quelled suspicions among homeowners that the independent review was an empty promise, or worse, a fraud. But the effort went nowhere.

Now, the first payments to homeowners are not expected until late March.

Article in full here…


OCC head defends decision to end independent foreclosure reviews

OCC head defends decision to end independent foreclosure reviews

Thomas Curry, Comptroller of the Currency, publicly defended the agency’s mutual decision with other regulators to end a complex process of reviewing foreclosures for signs of deception and document mishandling on Wednesday.

While speaking in front of a Women in Housing and Finance conference, Curry said by November 2012, servicers spent $2 billion on consultants to review foreclosures, but no borrowers had been compensated.

The complexity of the review process, as well as the large cost, prompted the OCC and other regulators to settle with servicers for $8.5 billion, ending the foreclosure review process for good.

Curry said, agencies “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, and the Federal Reserve came to the same conclusion.”

Yet, the move caught a wave of criticism from consumer advocates and members of Congress, who questioned the process of settling with borrowers without first determining the exact harms suffered and offering homeowners a full review.

This criticism was not lost on Curry.

The Comptroller told conference attendees, “This was not a decision I made lightly. I knew the servicers, independent consultants, community groups and even some members of Congress had made a personal and concerted effort to support the process and make it work as well as possible. In the end, changing course was the right thing to do, for borrowers, for servicers, for the federal banking system, and for the housing markets”

Judge denies Wells Fargo attempt to fight financial crisis suit

WASHINGTON, Feb 12 (Reuters) – A federal judge on Tuesday denied Wells Fargo’s attempt to beat back a financial-crisis lawsuit by arguing it conflicted with an earlier settlement.

District Judge Rosemary Collyer in Washington, who is supervising the 2012 multi-bank $25 billion mortgage misconduct settlement, said she did not agree with the bank’s assessment of that settlement.

But she declined to rule on the new Justice Department lawsuit, which is seeking damages and penalties for more than 10 years of alleged misconduct related to government-insured Federal Housing Administration loans, and left a federal court in New York to determine whether the two conflict.

The fourth-largest U.S. bank had asked Collyer in November to rule that the government violated the terms of the multi-bank deal in filing a new case.

Wells Fargo said the earlier consent judgment “wiped the slate clean” for the bank in terms of certain conduct related to its FHA portfolio.

But on Tuesday, Collyer said the language in the settlement “does not have the meaning ascribed to it by Wells Fargo,” and denied the bank’s request for an order enforcing the settlement.

Read on.


U.S., states near settling with more mortgage servicers on abuses

U.S., states near settling with more mortgage servicers on abuses

(Reuters) – Federal and state officials are close to entering another round of settlements to resolve robo-signing and other foreclosure abuses by mortgage servicers, according to government officials familiar with the matter.

The advancement in the settlement discussions comes one year after the Justice Department and state attorneys general announced a related $25 billion deal with five major banks.

Talks with three additional servicers are at an advanced stage and announcements could come in the next month or two, said the officials, who asked not to be named. They would not disclose which servicers are close to settling.

Another half-dozen servicers could eventually settle for a combination of cash and relief to distressed homeowners, bringing the total for the remaining servicers up to $5 billion, though it could be less depending on how many servicers authorities decide to go after.