Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

Washington
GAO Report: Independent Foreclosure Review Process Is Flawed
WASHINGTON (4/5/13)--Complexity, overly broad guidance, and limited monitoring for consistency hampered the progress of regulators' Independent Foreclosure Review (IFR), the U.S. Government Accountability Office (GAO) reported on Thursday.

The IFR process started in 2011 as part of consent orders issued against 14 top mortgage servicers. The foreclosure review process was meant to provide foreclosed borrowers with an opportunity to have their cases reviewed for errors and misrepresentations on the part of servicers. Restitution was also a possibility for some foreclosed borrowers.

The Office of the Comptroller of the Currency and the Federal Reserve Board on Jan. 7 announced that the IFR process would instead be replaced with a tentative $9.3 billion settlement. The settlement would allow all IFR-eligible borrowers "to receive compensation significantly more quickly," the OCC said in a release.

Thursday's GAO report said limited communication with borrowers and the public adversely impacted transparency and public confidence in the foreclosure review. Borrowers that asked for reviews also experienced gaps in communication, with some waiting for nearly one year before they were updated on the status of their case, the GAO said.

"Broad guidance and limited monitoring reduced the potential usefulness of data from consultants and increased risks of inconsistency," the GAO added. Guidance for consultants and others reviewing lending cases was revised. "Regulators lacked objective monitoring measures, resulting in difficulty assessing the extent of borrower harm," GAO added.

Rep. Maxine Waters (D-Calif.), who, along with other legislators, requested the GAO study in early 2012, said "the report confirms that the Independent Foreclosure Review process was poorly designed and executed." She also criticized the OCC's oversight of independent consultants that were hired by mortgage servicers to work the review cases, and said she will soon introduce "legislation to address the problem of relying on outside contractors for enforcement actions.

For the GAO report and Rep. Waters' statement, use the resource link.
RSS





print
News Now LiveWire
CUNA: CUNA offices closed through Friday, News Now returns Monday http://t.co/a5xbLzQKDj
12 24 ago
Reminder: @CUNA's Madison, D.C. offices will be closed through Friday, open again on Monday. #NewsNow will publish Monday.
12 23 ago
MI dentist to match @CUDirect's $20K to @HurleyMedical as a result of #20for20 online voting http://t.co/hqmIc9LpK1 @CMNHospitals
12 23 ago
New #creditunion chartered in St. Louis - #LutheranFCU - by @TheNCUA http://t.co/faPfANGS0P. Only 3rd new FCU charter this year.
12 23 ago
Don't get hacked during the holidays-use these tips from @CUNA http://t.co/jEqxni6NhO #StoptheDataBreaches http://t.co/woIxPOIyys
12 23 ago