A recent report by the U.S. Government Accountability Office (GAO) suggests there were significantly higher errors and mistakes made by banks and their agents during the foreclosure reviews. We may never know how many mistakes and other issues the banks made because the reviews were halted by another government agency.
The Office of the Comptroller of the Currency (OCC) and the Federal Reserve who were the banking regulators, ended the independent foreclosure reviews last year before most of the banks had completed their examinations of mortgage modification and foreclosure practices.
During that time, the OCC and the Federal Reserve found the bank-hired consultants were delaying compensation to borrowers who had improper modifications and other foreclosure issues which lead to their decision to stop the reviews.
However, that decision to stop the reviews terminated the OCC and the Federal Reserve from finding to what extent borrowers were having. We do know there were bungled modifications, robo-signing, wrongful foreclosures, improper fees and foreclosure paperwork filed without verification. What other issues may have been uncovered remain unseen and we will probably never know to what extent homeowners suffered.
Further, with limited information due to the reviews being stopped, they plowed ahead and negotiated a $10 billion settlement with 15 banks according to the GAO report. It’s feared the settlement was reached without adequate investigation into the actual harms committed by the banks and servicers.
When the reviews were stopped, some banks were further along than others. Some banks had reviewed less than 2% of the files and, of course, reported a lower error rate than banks that had reviewed 25 or 35% of their files.
It was also noted the consultants that the banks hired to review their files racked up hundreds of millions in fees while barely making a dent in reviewing the files.
In the GAO report, the regulators were criticized for failing to oversee the $6 billion in foreclosure prevention measures in the agreements. The regulators also failed to define specific objectives for the foreclosure prevention measures although they did tell the banks “they should be meaningful” according to the report.
Another reported problem is at least 20% of homeowners can’t be found because those homeowners were forced to move and can’t be located.
The GAO report lists many recommendations from taking additional steps ensuring foreclosure prevention principles are being incorporated to transparency and restoring public confidence. At this date all recommendations remain in an “Open” status with no timeline in view.
Keith A. Gantenbein, Jr. is a licensed, Colorado consumer rights attorney, focusing his practice as a foreclosure defense attorney and real estate attorney located in Denver and servicing all of Colorado. His Colorado foreclosure defense practice includes foreclosure prevention, judicial foreclosure, HOA foreclosures, foreclosure assistance, loan modifications, short sales, and all other foreclosure defense legal assistance. His real estate practice includes real estate closings, title issues, lien issues, quiet title, real estate contracts, bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, evictions, contracts and landlord/tenant. His real estate practice also focuses on his practice as an HOA defense attorney in Colorado, defending homeowners against HOA claims in HOA lawsuits and defense against wrongful covenant enforcement.
If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Colorado foreclosure defense attorney Keith Gantenbein at (303) 618-2122 for a one-hour consultation, where he will discuss your situation and go over all your options with you.
Gantenbein Law Firm practice includes Colorado Foreclosure Defense, Colorado Real Estate Law, Colorado and Federal Tax Law, Colorado Business Law, Credit Dispute and Credit Repair, and Colorado Wills & Trusts. For more information, visit our website: www.gantenbeinlaw.com
Gantenbein Law Firm also specializes in Federal and Colorado Tax Law. If you are facing an IRS tax audit, IRS tax appeal, tax litigation, or need help with an IRS installment plan or IRS offer in compromise, contact our Denver tax attorney immediately at 303-618-2122. Or, visit our Denver tax attorney website