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Thanks to Max Gardner III for this information:
UNITED STATES CONGRESS
For Immediate ReleaseJanuary 31, 2013
Contacts
Cummings: 202-226-5181
Warren: 202-224-4543
Warren and Cummings Launch Joint Investigation of
Settlement Ending Independent Foreclosure Review Process
Washington, D.C. (Jan. 31, 2013) -- Today, Senator Elizabeth Warren (D-MA) and Rep. Elijah E. Cummings (D-MD)sent a letterto Federal Reserve Chairman Ben Bernanke and Comptroller of the Currency
Thomas Curry seeking documents relating to their recent settlement with
mortgage servicers that ended the Independent Foreclosure Review (IFR)
process.
confidence
necessary to speed recovery of the housing markets will exist only if
the OCC and theFederal Reserve
provide additional transparency into the process used and information
gathered during the Independent Foreclosure Review process, wroteWarren and Cummings. It is critical that the OCC andthe Federal Reserve disclose additional information about the scope of the
harms found to establish confidence in the sufficiency and integrity of
the settlement.
The IFR was established under consent orders issued by these agencies in 2011 to 14 mortgage servicers that engaged in unsafe and unsound practices related to residential mortgage servicing and foreclosure processing. The new
settlement, announced on January 7, abruptly ended the IFR process and
required banks to provide cash payments and other assistance to
borrowers who had homes in foreclosure in 2009 and 2010.
The Members requested documents and information including:
ce reviews by the Federal Reserve or the
OCC, including all documents reviewing the performance of each of the
independent contractors that conducted reviews of borrower files under
the terms of the consent orders issued in April 2011;
deral Reserve or the OCC indicating the
total amount of settlement funds paid to each independent contractor; and
orrower files initiated by each of the independent contractors, and the number of borrower files in which unsafe or unsound practices were found.
The full letter follows:
January 31, 2013
The Honorable Ben S. Bernanke
Chairman
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, DC 20551
The Honorable Thomas J. Curry
Comptroller of the Currency
Administrator of National Banks
Washington, DC 20219
Dear Chairman Bernanke and Comptroller Curry:
We write today to request documents and information pertaining to the
recent settlements announced between the Board of Governors of the
Federal Reserve System (Federal Reserve), the Office of the Comptroller
of the Currency (OCC), and mortgage servicers subject to consent orders
issued by the Federal Reserve and the OCC in April 2011.
As you know, in April 2011, the Federal Reserve and the OCC issued consent agreements with 14 mortgage servicers regarding unsafe and unsound
practices related to residential mortgage loan servicing and foreclosure processing. As part of those agreements, the mortgage servicers were
required to establish an Independent Foreclosure Review process under
which borrowers whose homes were in foreclosure in 2009 or 2010 could
request reviews of their files if they believed they had been subjected
to an illegal or improper practice.[[1] Board of Governors of the Federal Reserve System, Press Release (Apr. 13, 2011) (online at www.federalreserve.gov/newsevents/press ... 10413a.htm); Office of the Comptroller of the Currency, OCC Takes Enforcement Action Against Eight Servicers for Unsafe and Unsound Foreclosure Practices, (Apr. 13, 2011) (online at www.occ.gov/news-issuances/news-release ... 11-47.html). 1]
On January 7, 2013, the Federal Reserve and the OCC announced that they
had reached a new settlement with 10 of the 14 servicers subject to the
2011 consent orders. Under this settlement, the servicers agreed to
provide a total of $8.5 billion in cash payments and other assistance
to borrowers, including $3.3 billion in direct payments to borrowers who had homes in foreclosure in 2009 or 2010. According to the OCC and the Federal Reserve, under the terms of this new settlement, the
participating servicers would cease the Independent Foreclosure Review,
which involved case-by-case reviews.[[2] Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency, Independent Foreclosure Review to Provide $3.3 Billion in Payments, $5.2 Billion in Mortgage Assistance (Jan. 7, 2013) (online at www.federalreserve.gov/newsevents/press ... 30107a.htm).2]
A page entitled What You Need to Know: Independent Foreclosure Review hosted on the website of the Federal Reserve indicates:
and the Federal Reserve accepted this agreement because it
provides the greatest benefit to consumers subject to unsafe and unsound mortgage servicing and foreclosure practices during the relevant period in a more timely manner than would have occurred under the review
process.[[3] Board of Governors of the Federal Reserve System, What You Need to Know: Independent Foreclosure Review (accessed on Jan. 21, 2013) (online at www.federalreserve.gov/consumerinfo/ind ... review.htm).3]
In a similar statement on January 7, 2013, Mr. Curry indicated that
although the agencies learned a great deal from the reviews that have
been conducted to date under the Independent Foreclosure Review
process, it has become clear that carrying the process through to its
conclusion would divert money away from the impacted homeowners and also needlessly delay the dispensation of compensation to affected
borrowers. Mr. Curry further stated that the terms of the new
settlement will get more money to more people more quickly, and it will speed recovery in the nations housing markets.[[4] Office of the Comptroller of the Currency, Statement from Comptroller of the Currency Thomas J. Curry on the IFR Settlement (Jan. 7, 2013) (online at
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