I knew Elizabeth Warren wasn’t going to sit in the corner and behave!
Three influential lawmakers on Thursday called for bank regulators to disclose more details of the $8.5 billion foreclosure abuse settlement reached earlier this month and to reveal what happened during the case-by-case review program it abruptly replaced.
In a letter to the Office of the Comptroller of the Currency and the Federal Reserve, Sen. Elizabeth Warren (D-Mass.) and Rep. Elijah Cummings (D-Md.) wrote that “additional transparency” was necessary to ensure the confidence necessary “to speed recovery in the housing markets.” They asked regulators to turn over the results of the performance reviews of the independent contractors hired to examine the loan files, as well as detailed information about the reviews’ preliminary results, to determine the extent of the harm to the 500,000 people who applied to the program.
In a separate letter, Rep. Maxine Waters (D-Calif.) called the sudden end of the foreclosure reviews “troubling” and asked that an independent monitor be named to oversee the new deal.
Under the foreclosure settlement, announced Jan. 7, 11 large mortgage companies, including the biggest banks — JPMorgan Chase, Wells Fargo and Bank of America — agreed to distribute $3.3 billion in cash payments to homeowners who received a foreclosure notice between 2009 and 2010. The lenders pledged an additional $5.2 billion to loan modifications and other programs meant to prevent future foreclosures.
The agreement comes on top of a settlement reached between five banks, 49 states and the federal government in 2012 to resolve alleged document forging and mortgage management, or “servicing,” abuses. It replaces a key piece of an earlier 2011 agreement known as the Independent Foreclosure Review.
Bank regulators initially described that review as giving homeowners who believed their mortgage company made a mistake or error during the course of their foreclosure, such as an overcharge or a botched loan modification, a chance to have an independent consultant review their case and award financial compensation of up to $125,000.
Thanks to Seth Price.