Lawmaker Seeks Details on Foreclosure Reviews

Jeff Rae ‏@jeffrae

Lawmaker Seeks Details on Foreclosure Reviews #ows
http://www.nytimes.com/2013/01/19/business/carolyn-maloney-seeks-inquiry-on-costs-of-foreclosure-reviews.html …

Carolyn Maloney, a New York Democrat who is a member of the House Financial Services Committee, has asked the federal regulators who oversee foreclosure reviews to provide details about the independent contractors who examined borrowers’ cases. The contractors reportedly received more than $1 billion in fees, which ultimately led to a $3.3 billion cash settlement for borrowers.

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“Although I understand that hiring independent consultants was a requirement under the consent order,” Ms. Maloney wrote, “I can’t help but question the effectiveness of a process that led to $1.5 billion in fees to a small number of consultants and only slightly more than twice that in relief to millions of injured borrowers.”

Eight consulting firms were hired by the banks to conduct the foreclosure reviews under the regulatory consent order. They included Ernst & Young, Deloitte & Touche, PricewaterhouseCoopers and the Promontory Financial Group. The review was ended this month after only a small portion of the loans had been analyzed.

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“Millions of Americans fell victim to abusive mortgage practices,” Ms. Maloney said in an interview last week. “This review process was supposed to identify the injured borrowers, but it has taken too long and has been enormously expensive. The announcement of the settlement was clearly an indication that something went wrong with the process. Why were these consultants paid so much money and what did they do?”