Last week, Bank of America, Wells Fargo, JPMorgan Chase along with seven other lenders agreed to settle with banking regulators by paying the regulators $8.5 billion. Out of that settlement, $3.3 billion is suppose to go to direct payments to “eligible borrowers” whose foreclosures were mishandled. This settlement is suppose to resolve claims of foreclosure abuses including bad paperwork and mishandled loan modifications.
The Office of the Comptroller of the Currency and the Federal Reserve (the regulators) also announced homeowners no longer had to worry about the Independent Foreclosure Reviews. The regulators essentially decided the reviews were too tough to conduct. Many homeowners were dismayed having filed mounds of paperwork for an independent review only to learn the regulators have abandoned the program.
Apparently no one is concerned over the $1.5 billion spent paying consultants who spent tens of thousands of man-hours going over nearly 500,000 loan files homeowners sent in for the review process.
Federal regulators have decided that ‘assigning the appropriate compensation’ to the borrowers who were most harmed was no longer a priority.
The mortgage companies will themselves, determine how to distribute the $3.3 billion to more than 4 million homeowners forced into foreclosure in 2009 and 2010. Regulators stated the review process was too time-consuming and costly for them to conduct. Too time-consuming and costly to help compensate abuses the homeowners suffered? Really?
As an advocate for homeowners, I can only compare having the mortgage companies decide its own distribution is kin to the fox guarding the henhouse. The mortgage companies have acknowledged they erred and were flawed. How is giving these mortgage companies the power to distribute money for errors they made a good course of action? Why wasn’t a third party brought in to decide the distribution?
Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes foreclosure prevention, foreclosure assistance, loan modifications, short sales, and all other foreclosure defense legal assistance. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact 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.