Francine McKenna: ResCap/Ally Will Settle With Fed Over Foreclosure Reviews

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Francine McKenna: ResCap/Ally Will Settle With Fed Over Foreclosure Reviews

Francine McKenna: ResCap/Ally Will Settle With Fed Over Foreclosure Reviews

Forbes-

Bankrupt mortgage originator and servicer Residential Capital, LLC, or ResCap, and its subsidiary GMAC Mortgage, filed a term sheet with the court on June 26 to establish a $230 million escrow account to fund its settlement the Federal Reserve and put a stop to its expensive FRB Foreclosure Review.

PricewaterhouseCoopers , ResCap’s “independent” foreclosure reviewer, has stopped work on its engagement.

According to documents filed with the court, the costs of the review were growing exponentially.

Both the scope of the FRB Foreclosure Review and the costs associated with performing the review continually have been increasing during the course of the review process.The Debtors estimated that, as of the Petition Date, the performance of the FRB Foreclosure Review may cost as much as $180 million. By August, the Debtors’ estimate of the cost of the FRB Foreclosure Review had risen to $250 million. Since August, the FRB has imposed still further changes to the scope of the FRB Foreclosure Review, and the Debtors believe that the cost of the review (and remediation of any borrower harm) may balloon still further if nothing is done to stem the costs, perhaps reaching $415 to $459 million.

[FORBES]

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One Response to “Francine McKenna: ResCap/Ally Will Settle With Fed Over Foreclosure Reviews”

  1. Should we feel sorry for these crooks, that brought this on themselves? Now does the harmed homeowner receive slap in the face with a middle finger up your nose check for the harm? once again.

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