Today the federal Office of Comptroller of the Currency (OCC) released the latest update on the enforcement of its lame Consent Orders negotiated with the industry over the summer. Many were critical of those “orders” here.
The update aka Interim Status Report covers several topics which we’ll chew on later undoubtedly, but it does release some of the details on the federally created Independent Foreclosure Review which some have suspected will be whitewash job to help the industry cover its robo-signed tracks. Story here and here. The Independent Foreclosure Review is not going to be done by a judge, a neutral attorney familiar with the law, or governmental official — the reviewers are instead hand-picked accounting firms selected by the loan servicers and paid by the loan servicers. Who are they?
[And the winning accountants especially selected and paid for by each servicer are]:
- AllonHill, LLC, for Aurora Bank;
- Clayton Services, LLC, for EverBank;
- Deloitte & Touche, LLP, for JPMorgan Chase;
- Ernst & Young, LLP, for HSBC and MetLife Bank;
- Navigant Consulting, Inc., for OneWest;
- PricewaterhouseCoopers, LLC, for Citibank and US Bank;
- Promontory Financial Group, LLC, for Bank of America, PNC, and Wells Fargo Bank; and
- Treliant Risk Advisors, LLC, for Sovereign Bank.
OCC Interim Status Report: Foreclosure-Related Consent Orders November 2011, at Page 5 here.
If you could, wouldn’t you want to hand pick the judge that decides your fate in loads of cases and be the one to pay him? Would you want him to understand the law or just be able to count? The feds decided to explain that the Independent Foreclosure Reviewers are really, really independent because they label them as independent repeatedly in their report and because they rejected some of the consultants initially recommended by the servicers. Reminds me of the Herman Cain defense paraphrased: “Some will claim that I sexually harassed them but there are thousands that will say I didn’t.” (Actual quote here.) Wow, OCC rejected some of the hand-picked people — that must mean they have approved ones that are truly independent.
On Page 6 of the report OCC explains all the requirements needed in order for the approved reviewers to maintain independence. It is nice that they have something written down, after all, the financial services industry is well known for abiding by memos, guidances, and directive from regulators. (See Jon Corzine, MF Global and the missing 1.2 billion here. Of course when the firm was borrowing at ratios close to 40 to 1, the regulators sent memos. Yeah that worked well. Now there is a “shortfall” that is growing. Wallstreet even whitewashes the term for theft.) Memos, directives and guidances on independence are not nearly as critical if servicers did not get to hand-pick and pay the reviewers directly.
But OCC did not just name the reviewers, it provided the letter agreements between the parties — redacted. OCC link here. Remember the OCC considers lenders and their cronies to be their customers. I don’t know what term they give homeowners or the taxpayers. Regardless, OCC’s customers would likely prefer that as little information gets out to the public as possible. So naturally, OCC has blocked out entire pages of the letter agreements. OCC says they blocked a little information that is personal and proprietary.
I counted over 22 pages were blocked out just in the agreement between the reviewer and Bank of America. Many of the blocked out pages appear to describe the review process itself and possible conflicts of interest.
See the Letter Agreement for reviewer Promontory Financial Group, September 6, 2011 - here.
Of course there were block-outs scattered throughout the entire document as well. I am still reviewing the agreements with the other reviewers. OCC is leaking a little more information, but not enough for anyone to really believe the Independent Foreclosure Review process is fair. If you feel differently, I’ve got some MF Global stock to sell you.
Filed under: National Foreclosure News