Washington, D.C. -Today, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, issued the following statement in response to a Government Accountability Office (G.A.O.) report of the Independent Foreclosure Review (IFR) process:
“Today’s new GAO report raises even more concerns about the settlement that prematurely terminated the Independent Foreclosure Review right as it was poised to expose the full extent of abuses by mortgage servicing companies. I hope Chairman Issa agrees to the request I made last week for a public hearing to obtain testimony from regulators and mortgage banks to determine whether the victims of foreclosure abuses are receiving the compensation they deserve for the harm they suffered."
Cummings requested the hearing based on new documents obtained by the Committee showing that independent consultants brought in to review servicer abuses had identified high error rates in some categories directly before the IFR was terminated and the final settlement was announced. For example, Bank of America’s independent consultant, Promontory Financial Group, LLC, found the bank had a 60% error rate in loan modification efforts; a 19% error rate in charging fees; and a 16% error rate in loans involving bankruptcy that were reviewed. Promontory found similar trends in PNC Bank’s foreclosure activities, including “borrower financial injury" in 21% of cases reviewed.
The new documents also show that independent consultants had conducted significant preparatory work assembling files and creating systems in preparation for comprehensive reviews, but regulators suddenly halted these efforts in January 2013 despite projections that they would have been completed in months.
To date, Issa has not responded to Cummings’ request.
