Category Archives: Real estate

OCC Misses Another Conflict of Interest: Foreclosure Review Outreach/Payment Processor Rust Consulting Owned By Residential Real Estate Player Apollo, Being Sold to VC Arm of Citigroup

It appears that the Office of the Comptroller of the Currency and the Fed dropped the ball yet again on vetting firms involved in the Orwellianly-named Independent Foreclosure Review (IFR) for conflicts of interest. Michael Olenick’s expose on Allonhill, one of the “independent consultants” hired by Wells Fargo, led to Allonhill’s role being curtailed considerably.

But there’s no way to curtail the role of Rust Consulting, a firm that has been central in the Independent Foreclosure Reviews virtually from their onset. And as we’ll see, Rust has ample conflicts of interest when it was engaged to handle mailings and outreach under the IFR, and is about to become even more conflicted.

Bank “Zombie Title” Rises, Hurting Communities and Borrowers, as OCC and Fed Sit Pat

We’ve written before about the perverse phenomenon known as “zombie title.” Kate Berry of American Banker provides an update.

Independent Foreclosure Review Fiasco: OCC and Fed Decided Not to Find Harm

The last few days have had more and more ugly revelations emerge about the botched OCC and Fed Independent Foreclosure Review settlement, with some particularly important ones coming out of the hearings in Robert Menendez’s Senate Banking subcommittee today.

Foreclosure Review Hearings Show It’s Time to Burn Down the OCC

There has already been a lot of good commentary on the Senate hearings on the misnamed Independent Foreclosure Reviews, notably by Pam Martens. I’ve finally gotten a transcript (it will be going up shortly at Corrente) which helps in reviewing it more carefully. Since Part 2 of the hearings take place this week, I’ll focus on some key issues that haven’t gotten the attention they warrant.

Fed Argues that Mortgage Abuses are Trade Secrets, Meaning Institutionalized Fraud

When the media discusses how banks have ridden like a steamroller over borrowers and investors, the typical response is a combination of minimization and distancing: that the offense wasn’t such a big deal and that it was a mistake. Recall the PR barrage in the wake of the robosigning scandal: its was “sloppiness,” “paperwork errors”.

Two major government settlements later, this position is looking awfully strained. And the Fed, in stonewalling Elizabeth Warren’s and Elijah Cumming’s efforts to get more information about the Independent Foreclosure Reviews, presented the bad practices as servicer policies, which means that they were deliberate, hence, fraudulent.

OCC Releases Embarrassing List of Foreclosure Review Payouts on Eve of Senate Hearings

As much as people who were watching the shutdown of the foreclosure reviews expected the payouts to be grotesquely low, seeing the actual numbers is….revolting.

Launching Improved PC/Android/Printer Friendly Version of Our Free Ebook on the OCC/Fed Foreclosure Review Fiasco

As readers may know, last Friday we released an ebook based on our investigative series based on testimony from whistleblowers at Bank of America and PNC on the whitewash more formally known as the Independent Foreclosure Reviews. The response from readers was very positive, but some were disappointed that the side-by-side format we chose, which looks good on a Mac, renders badly on PC.

One of the problems of being in blogger low-overhead mode is that you wind up learning by doing, rather than in big corporate mode of being able to do a lot of pre-launch testing and double-checking. So we apologize for any frustration we may have caused to interested readers.

GAO Report on Foreclosure Reviews Misses How Regulators Conspired with Banks Against Homeowners

I suppose one has to be grateful for any official pushback against failed regulatory initiatives, such as the just-released GAO report criticizing the Independent Foreclosure Reviews. Of course, in this instance, I am charitably assuming that these reviews were a failure. They have certainly proven to be an embarrassment to the lead actor, the OCC, which has tried to maintain as low a profile as possible on this topic rather than offer any defenses.

But “failure” assumes that the OCC and the Fed did not achieve their real objective, which was to protect the banks. That hardly appears to be the case.

Launching Our First (Free) Ebook on the OCC/Fed Foreclosure Review Fiasco

As a result of many reader requests, we’ve turned our series based on testimony from whistleblowers at Bank of America and PNC on the whitewash more formally known as the Independent Foreclosure Reviews into an ebook, which we are releasing today. Please download, read, and share!

David Dayen: GAO Report on Independent Foreclosure Reviews Exposes OCC, Fed’s Plan to Deliberately Minimize Evidence of Borrower Harm

By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen

This morning the Government Accountability Office released their second report on the Independent Foreclosure Reviews.

Promontory Decides to Reinvest Part of its $1 Billion of Ill Gotten Gains from Botched Foreclosure Reviews By Buying Hiring Former SEC Chief Shapiro

As regular readers may recall, Promontory Financial Group was one of the huge winners from the joke on the public otherwise known as the Independent Foreclosure Review. The only accurate word in that label, it turns out, was “foreclosure”.

So how is Promontory using all its lucre? Buying up even more former regulators to further its reputation as a connected insider. Mary Shapiro had barely left the SEC when she was nominated for a board seat at General Electric, which despite its image as a manufacturer, has for over two decades had nearly half its revenues coming from financial services. And now Shapiro has been signed by Promontory to help arm-twist regulators not to do their job.

Wolf Richter: Housing Bubble II – But This Time It’s Different

We have seen it for several years: foreclosure sales have become the hunting grounds for investors with two goals: hanging on to these homes until the Fed’s flood of money drives up their value, and renting them out. Thousands of smaller investors have piled into the game. And so have the giants. But now the second half of the equation is collapsing.

Even American Banker is Savaging the OCC’s Mortgage Settlement

It’s clear the OCC is winging details it should have nailed down before settling.

Whistleblower: Wells Fargo Fabricated and Altered Mortgage Documents on a Mass Basis

Over the last two and a half years, Wells Fargo, like most of the major mortgage servicers, claimed that it had a “rigorous system” to insure that mortgage documents were accurate and complete. The reason this mattered was that there was significant evidence to the contrary. Foreclosure defense attorneys found repeatedly that, for securitized mortgages, the servicer or foreclosure mill attorney would present documents to the court that failed to show the borrower’s note (a promissory note) had been transferred properly to the trust. This mattered not only on a borrower level, but indicated that originators of the mortgage securitizations hadn’t bothered transferring the notes properly to the trusts that were to hold them. This raised the ugly specter of what was called “securitization fail,” that investors had been sold securities that they had been told were mortgage backed when they might in practice not be.

The robosiging scandal was merely the tip of the iceberg of mortgage and foreclosure problems that resulted from the failure to adhere to the requirements of well-settled state real estate law. The banks maintained that there was nothing wrong with mortgage ownership or with the records. All they had were occasional errors and some unfortunate corners-cutting with affidavits. If they merely re-executed all those robosigned documents, all would be well.

Wells Fargo’s own actions say the reverse.

Congressmen Criticizing OCC Mortgage Settlement, While More Misrepresentations and Coverups Emerge

The Wall Street Journal today stresses that a lot of Democratic congressmen are unhappy about the botched settlement process but are unlikely to do more than beef because the new Comptroller of the Currency, Tom Curry, was selected by Obama.

But the more people poke at the settlement, the more creepy crawlies emerge.