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xchrom

(108,903 posts) Fri Apr 12, 2013, 08:48 AM Apr 2013

Foreclosure Review Report Shows That the OCC Continues to Bury Wall Street’s Bodies

http://www.thenation.com/article/173749/foreclosure-review-report-shows-occ-continues-bury-wall-streets-bodies

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Deception #1: Regulators obfuscated abuses by failing to provide a consistent approach.

The GAO report shows that regulators failed to design a single methodology for all consultants to use, instead leaving it up to each consulting firm. Without a clear methodology set by the regulators, consultants had vastly different approaches, reviewed different categories of problems and created data that could not be aggregated. Because of this inconsistency, we have no easy way of knowing if Citigroup’s servicing violations were more or less egregious than Wells Fargo’s. And really, how better for the regulators to obscure the consistent harm banks commit against homeowners than to inject as much chaos as possible into the process of reviewing said harm?

Deception #2: Lack of transparency.

In addition to failing to report problems across all the bank servicers, the OCC and the Fed also refused to disclose specifics about the individual servicers. Earlier this year, Representative Waters sent a letter to the OCC requesting the preliminary results of the foreclosure reviews at the individual servicers and a second letter requesting, among many items, all calls from the consultants to the regulators. To date, the OCC has not provided the requested documents. Senator Elizabeth Warren and Representative Elijah Cummings also requested all updates the individual servicers made to the regulators, but as documented in their recent letter, have also received no response to date. So regulators refused to create a way to show abuses across banks and also refused to give us information about abuses at individual banks.

Deception #3: The OCC misled the public about how many homeowners were harmed.

Earlier this year, the OCC claimed that of all the foreclosure cases reviewed, there were only errors made by the servicers 4.2 percent of the time (a mistake in servicing was considered an “error” if it caused the homeowner financial harm). This number was immediately questioned by the press, with The Wall Street Journal reporting that the real error rates were far higher, with Wells Fargo’s error rate at 11 percent. The Journal’s report showed that the OCC could only have arrived at their error rate by gaming the numbers.

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Deception #4: Missing Documents were not considered “errors.”

Also revealed by the report was that the OCC did not define missing documents as an error, though they were “planning” to do so. If you are a homeowner who’s been illegally foreclosed on because your mortgage servicer lost documentation of your payments, you should know the OCC couldn’t be bothered to insist that constituted an error.