Cummings introduces a bill to create “Independent Monitor” to oversee illegal foreclosure settlement & other mortgage servicer abuses

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Cummings introduces a bill to create “Independent Monitor” to oversee illegal foreclosure settlement & other mortgage servicer abuses

Cummings introduces a bill to create “Independent Monitor” to oversee illegal foreclosure settlement & other mortgage servicer abuses

Washington, D.C. (Apr. 25, 2013)—Today, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, announced the introduction of H.R. 1706, The Mortgage Settlement Monitoring Act of 2013, to create an Independent Monitor to oversee the distribution of funds paid by mortgage servicers for illegal foreclosures and other abuses against homeowners under their settlement agreement with federal regulators.

Original co-sponsors of the legislation include Ranking Members Maxine Waters, George Miller, John Conyers, and Henry Waxman, as well as Representatives John F. Tierney, Zoe Lofgren, and Jan Schakowsky.

The bill has been endorsed by the Center for Responsible Lending, the National Consumer Law Center, the National Fair Housing Alliance, the National Association of Consumer Advocates, Americans for Financial Reform, National People’s Action, the Connecticut Fair Housing Center, and Consumer Action.

“Mortgage servicers have now admitted that they broke the law by illegally foreclosing on American families and committing numerous other abuses, but regulators refuse to provide even the most basic information about the extent of the abuses that were uncovered,” said Cummings.  “Since federal regulators now plan to rely on these same banks to determine payouts and deliver settlement funds to borrowers, we need an Independent Monitor to bring transparency and accountability to this process.”

On February 28, 2013, the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency (OCC) entered into amended consent orders requiring 11 mortgage servicers that originally entered consent orders in 2011 to provide cash payments and other assistance to borrowers, including more than $3 billion in payments to borrowers who were in foreclosure in 2009 and 2010.  This settlement prematurely ended the Independent Foreclosure Review that banks were ordered to conduct to identify harms suffered by individual borrowers.

The Mortgage Settlement Monitoring Act of 2013 would create an Independent Monitor appointed by the President to review the compliance of all parties to the settlement—including both the mortgage servicers and the Federal Reserve and the OCC—and issue quarterly reports to Congress and the public.  These reports must include:

  • A description of the criteria and methodology used to determine eligibility for direct and indirect relief, as well as a description of due process protections for recipients;
  • Information on borrowers who receive relief, broken down by mortgage servicer and including demographic information, the level of direct compensation for similarly situated borrowers, and the number and amounts of principal reduction loan modifications and other types of borrower assistance;
  • Information on the credit given to mortgage servicers for direct and indirect compensation provided to borrowers; and
  • A list of instances in which mortgage servicers or regulators fail to comply with the terms of the settlement, and a list of actions taken by the Federal Reserve or the OCC to compel compliance.

On January 31, 2013, Cummings and Senator Elizabeth Warren launched a joint investigation of the settlement and requested that the Federal Reserve and the OCC provide documents relating to illegal actions by mortgage servicers identified during the Independent Foreclosure Review.  The Federal Reserve and OCC refused to provide these documents, arguing that they are the “trade secrets” of mortgage servicers.

On April 4, 2013, the Government Accountability Office issued a report examining the Independent Foreclosure Review, finding:  “Complexity of the reviews, overly broad guidance, and limited monitoring for consistency impeded the ability of the Office of the Comptroller of the Currency (OCC) and the Board of Governors of the Federal Reserve System (Federal Reserve) to achieve the goals of the foreclosure review.”  The report concluded that “limited communication with borrowers and the public adversely impacted transparency and public confidence” and recommended that regulators “apply lessons from the foreclosure review process, such as enhancing planning and monitoring activities to achieve goals, as they develop and implement the activities under the amended consent orders.”

Last week, the New York Times editorialized about the need for an independent monitor to oversee, analyze, and publicly report on the implementation of the settlement after some borrowers were unable to cash the checks they received as part of the deal.

source: democrats.oversight.house.gov

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5 Responses to “Cummings introduces a bill to create “Independent Monitor” to oversee illegal foreclosure settlement & other mortgage servicer abuses”

  1. David Mattison says:

    AAAAAH !?!?!? WHAT IS THE CONSUMER FINANCIAL PROTECTION BUREAU FOR?

  2. papergate says:

    Nothing; useless.

  3. Sarah says:

    Cummings has stepped up once again, apparently no other body or committe or agency is committed to servicer abuses. To DC elites, the entire crisis is a victimless crime, and they want the whole thing to go away so they can line their pockets through another bubble in the making. The parasitical loan sharks have no remorse, and no sense, and haven’t been brought to justice, and won’t be.

    The CFPB appears to be at least partially dedicated to making sure predatory or abusive lending are protected or indemnified. To that end, an enhanced mortgage product that has a guarantee was finalized. (as if that is needed) and an ongoing lame attempt to foster education to victims, as if they are the ones primarly responsible for “getting in over their heads” when they need a place to live or are in other dire financial straights. It’s truly bizarre.

  4. Charles Reed says:

    Today I fax over to the OCC to reopen my complaint of over two years about the issue of “No Standing”! Amazing how after the tail end of the Independent (wink wink) Foreclosure Review Board after someone like myself return the review request FEDEX and delivered on Dec 17, 2011 with stating and providing the court documents and letter from the lender that they were not my lender, and that they thought Ginnie Mae was the lien holder.

    How is Ginnie Mae the lien holder when they don’t by home mortgage loans at all, and are not recorded at the local county register of deeds and they cannot produce a cancel check or wire transfer or a napkin with an amount of money they are insisting that I owe them.

    So we has a settlement agreed to by the OCC & Fed in Apr 2011, to have independently the files reviewed but they were not according to the independent reviewers and GOA, yet the payment chart from Jun 2012 has as item 11 of the Financial Remediation Framework, that said it was a case by case as with state laws.

    What state is allowing a entity that does not have Stating to Foreclose? What is the correction of this of theft? It you have no claim to the property and as in my case the bank submits fraudulent documents to the court to obtain control of the property and then sell the stolen goods, is authorized in what state?

    The FHA having $70 billion in loan losses? How does the FHA have 700,000 loans that could not be modified. Obama made Americans stupid believing people purchase more house than they could afford, as every FHA loan was a full income documented underwritten file, and not some Stated Loan scheme.

    I am not saying that every FHA loan was done legally, because as with anything there is crime, but I would say that % is small. The FHA borrowers loss a job or working less hours because of the crime by the lenders. The lenders created this chaos and the fallout was US jobs.

    Part of the mess is that the financial industry did not secure the debt and played loose with the rules and now has got caught without collateral. Its called Contract Law!

  5. David LeForge says:

    What about the people that are getting checks from the foreclosure review settlement that had never been in a foreclosure or remotly close to bieng in a foreclosure. What about the checks that are bieng sent back to Rust consulting, who gets that money?? There are a whole lot of questions still not bieng presented or answered.

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