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.
Read more...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.
Read more...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.
Read more...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.
Read more...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.
Read more...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.
Read more...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!
Read more...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.
Read more...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.
Read more...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.
Read more...It’s clear the OCC is winging details it should have nailed down before settling.
Read more...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.
Read more...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.
Read more...It’s really easy to have a fortress balance sheet if you can get other people to eat your losses
Read more...As a follow up to our series* on how Bank of America and its supposed independent consultant Promontory Financial Group, colluded to make a mockery of a process designed to provide compensation to borrowers who had suffered abuses in foreclosures during 2009 and 2010, we thought we would offer a few suggestions as to how to forestall future fiascoes of this sort.
Read more...