A reviewer who once worked for one of the 14 firms tapped by the Office of the Comptroller of the Currency to conduct independent foreclosure reviews has come forward to say that the process was a thinly veiled effort to promote the banks’ interests.
Our Miami foreclosure attorneys are not surprised by this news, particularly in the wake of the announcement of an $8.5 billion settlement on behalf of 10 banks that all but scraps the review process. However, it’s interesting to hear the truth straight from the horse’s mouth.
According to a blog post by NakedCapitalism.com, the former reviewer says that while some review firms hired junior employees who weren’t qualified to look over such claims, he and his team were experienced. However, the outcome of those claims were essentially predetermined, before his people ever set eyes on them.
Even giving the banks the benefit of the doubt, it doesn’t look good. Although the reviewers were in theory supposed to be impartial, it was the banks that were paying these firms huge sums of money. These were firms that bank administrators personally chose and which stood to make even more money from the bank as a future client if the bank was satisfied with the work. It was later found that in some cases, banks provided cases to reviewers with a default set of outcomes that favored the financial institution. It was up to the reviewers to alter the results if there was a finding that the bank was indeed at fault.
But as the reviewer reveals, it was apparently worse. It seems the banks were “actively involved in overseeing the project and the results were shameless rejection of any and every possible basis for borrowers getting recompense.” Reviewers would find several, sometimes dozens, of examples per file of the banks breaking the law. These would be things like foreclosing on homeowners in non-judicial states without advertising the notice of sale (as required by law). In other cases, the banks reportedly failed to send a notice of acceleration. And yet, the reviewers would not find in favor of the homeowner.
The reviewer said that the process started out appearing legitimate, and it seemed like it would be a chance to right the wrongs of the mortgage debacle. However, it became apparent early on that reviewers were expected to make biased decisions. For example, the instructors who trained the reviewers were employed by the bank, not the government.
It gets worse. In order for a review to be triggered, the consumer had to file a complaint. In order for them to file a complaint, they had to be notified that they qualified for a review. This was up to: the banks. And if the homeowner who had been foreclosed upon didn’t leave a forwarding address with the bank – the same one that had foreclosed upon them – they didn’t get a notice, the reviewer said.
Additionally, any findings of the review firms were forwarded to the banks’ quality control departments. The findings that the banks didn’t like, they were allowed to dispute. Homeowners weren’t given this same courtesy. And if the reviewer wouldn’t change it? As a contractor, they were subject to termination from the program without warning or cause – and that reportedly happened often.
The reviewer went on to recount numerous instances in which a wronged homeowner was denied relief because the bank essentially decided it had done nothing wrong.
These reviews were nothing more than a sham. The newest foreclosure settlement – an $8.5 million deal – reportedly will put a stop to them. However, they probably won’t provide as much relief as they should.
If you are facing foreclosure or have been a victim of wrongful foreclosure, we can help.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.
OCC Foreclosure Reviewer: “Independent” Reviews Were Controlled by Banks, Which Suppressed Any Findings of Harm to Foreclosed Homeowners, Jan. 4, 2013, By Yves Smith, Naked Capitalism
More Blog Entries:
Independent Foreclosure Review Junked in Advance of Watchdog Report, Jan. 5, 2013, Miami Foreclosure Lawyer Blog