The lawsuit was filed in U.S. District Court for the District of Columbia on behalf
of an unknown client seeking “All documents and/or records relating to the Office
of the Comptroller of the Currency (OCC) definition of independence” and “Any
documents and/or records relating to determining whether any particular independent
consultant…was or was not independent.”
The mortgage servicers and lenders had hired Promontory Financial Group,
PricewaterhouseCoopers, Ernst & Young and Deloitte & Touche to conduct the reviews.
In my article “Independent Foreclosure Review Botched?” published April 1st, I wrote
how “Promontory Financial, hired by Bank of America were reviewing Bank of America
loans at a Bank of America facility under the management of full-time Bank of America
employees. Bank of America reported those results to the ‘independent’ Promontory
Financial who based their reviews on what Bank of America gave them.”
That a lawsuit has been filed questioning the independence of the reviews comes as no
surprise. Consumers, homeowners, lawmakers and attorneys have criticized regulators
over the handling of the foreclosure reviews. Homeowners who are lucky enough to be
on the list to receive some type of settlement are angry and filing complaints the payouts
don’t match the wrongdoings.
The OCC and Federal Reserve shut down the reviews for most mortgage servicers
deciding instead, to provide about $9.3 billion in compensation. Postcards were mailed
out last month to eligible borrowers stating they would receive more information and/or
payments in about 4 to 6 weeks. Those payments are supposed be sent out beginning this
month and over the course of this year.
In December 2012, the OCC released five pages of redacted documents that related to
the reviewer’s independence and released information that could also be found on their
website. The OCC also stated new grounds for withholding additional information,
specifically not releasing inter-agency and intra-agency memorandums and letters.
Homeowners and borrowers saw the IFR as a way to finally have their voice heard on
the wrong that was done to them regarding foreclosures, robo-signing, wrongful fees
and other mistakes the lenders had made. Shutting down the IFR reneges on the OCC’s
promises to provide “appropriate compensation to borrowers who suffered financial
harm”. To date, under this new settlement, there still have not been definite answers
to how much relief will be given to the borrowers. Regulators have not released any
information as to how the payment amounts were determined. Without the reviews
there is no way to determine the extent of wrong done to each homeowner and what that
homeowner should receive in compensation.
Federal Chairman Ben Bernanke stated in congressional testimony in March that the
failed reviews should have ended sooner due to their costs. It’s sad that some or most
of that $2 billion wasn’t given as compensation to the homeowners instead of a failed
program. The money spent on the reviews was wasted since they weren’t completed.
Sadly, we will probably never know the degree of wrongdoings by the lenders and
mortgage servicers. Perhaps this lawsuit, and other lawsuits that are sure to follow might
shed a little more light on offenses and violations done to homeowners and borrowers.
Keith A. Gantenbein, Jr. is a Colorado consumer advocate attorney, foreclosure defense and real
estate 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, debt defense, debt harassment, contracts and landlord/tenant. If you think you will be
facing debt collection, 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.