Independent Foreclosure Review | Adam Levitin – More Rot in the OCC Foreclosure Reviews

“There are definitely problems that would come from putting the OCC under appropriations–I don’t relish the thought of politicized bank regulation. But the choice isn’t between politicized bank regulation and perfect bank regulation. Instead, the choice is between politicized bank regulation and captured bank regulation. And I’d take the former 7 times a week and twice on Sundays. Politicized bank regulation wouldn’t necessarily mean wild see-saws. Instead, I might keep the OCC in check and moderate because the OCC would know that there’s an election every two years, so it had best not get out of hand either way.


More Rot in the OCC Foreclosure Reviews

Michael Olenick, Gretchen Morgenson, and Yves Smith have all written pretty damning things about the foreclosure reviews persuant to the OCC consent orders with major mortgage servicers. (For my own previous thoughts, see here and here.) I’ve just started to peruse some of the engagement letters with the firms conducting the reviews, and the rot is even worse that these other critics portray.

What follows is in no way a comprehensive cataloging of the problems in the OCC foreclosure review process–this is just what I spotted from the briefest of perusals. Yet it is clear that there are two types of serious problems: conflicts of interest and flawed substance of the review process. I’ll lay both out below and then give some thoughts as to what could and should be done to remedy this farcical process in order to ensure some accountability to the public and justice for homeowners. The post concludes with some thoughts about the core problem–the OCC–and what can be done to remedy it.

Rest here…


OCC Foreclosure Fraud Review Tips

First check your eligibility.

From the OCC Independent Review site,

Si usted habla español, tenemos representantes que pueden asistirle en su idioma.

Homeowners whose primary residence was part of a foreclosure action between January 1, 2009 and December 31, 2010, and whose home loan was serviced by a participating servicer, may be eligible for an Independent Foreclosure Review.

The Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency (federal bank regulators) have required an Independent Foreclosure Review by an independent consultant to identify eligible customers who may have been financially injured due to errors, misrepresentations or other deficiencies in their foreclosure process. If the review finds that financial injury occurred, the customer may receive compensation or other remedy.

To qualify, your mortgage loan would need to meet the initial eligibility criteria:

  • Your mortgage loan was serviced by one of the participating mortgage servicers.
  • Your mortgage loan was active in the foreclosure process between January 1, 2009 and December 31, 2010.
  • The property was your primary residence.

Eligible customers will be mailed a letter by December 31, 2011 that explains the Independent Foreclosure Review process and a Request for Review Form that identifies some examples of situations that may have led to financial injury. The form must be completed and postmarked no later than April 30, 2012.

Julie Williams, First Senior Deputy Comptroller and Chief Counsel Office of the Comptroller of the Currency provided written and verbal testimony to Congress on December 13, 2011. She enumerated the faulty OCC Interdependent Foreclosure Fraud Review Process. Please read her testimony here.

Read all twenty-two items listed on page 13-15. Using the exact language, transcribe each and every item that fits your scenario.


Itemized list from testimony

  1. The borrower was not in default pursuant to the terms of the note and mortgage at the time the servicer initiated the foreclosure action.
  2. The servicer initiated foreclosure or conducted a foreclosure sale in advance of the time allowed for foreclosure under the terms of the note and mortgage or applicable state law.
  3. The borrower submitted payment to the servicer sufficient to cure the default pursuant tothe terms of the note and mortgage, but the servicer returned the payment incontravention of the terms of the note or mortgage, state or federal law, or the servicer’s stated policy covering payments when in default.
  4. The servicer misapplied borrower payments, did not timely credit borrower payments(including failure to properly account for funds in suspense), or did not correctly calculate the amount actually due from the borrower, in contravention of the terms of the note and mortgage, state or federal law, investor requirements, or the servicer’s stated policy covering application of payments.
  5. The borrower paid a fee or penalty that was impermissible.
  6. A deficiency judgment was obtained against the borrower that included the assessment of a fee or penalty that was impermissible.
  7. The servicer placed an escrow account on the mortgage and the placement resulted in monies paid by the borrower into escrow in contravention of the terms of the note or mortgage, state or federal law, or the servicer’s stated policy covering escrow accounts.
  8. The servicer placed insurance on the mortgage and the placement resulted in monies paid by the borrower towards insurance in contravention of the terms of the note or mortgage,state or federal law, or the servicer’s stated policy covering placed insurance.9.
  9. The servicer miscalculated the amount due on the mortgage and secured a judgment against the borrower for an amount greater than the borrower owed.
  10. A borrower’s remittance of funds to a third party acting on behalf of the servicer was no tcredited to the borrower’s account.
  11. The borrower was performing under the terms of an approved trial loan modification oran approved permanent loan modification, but the servicer proceeded to foreclosure incontravention of the terms of the modification offered by the servicer to the borrower.
  12. A borrower was denied a modification in contravention of the terms of the governing modification program or the servicer’s stated policy covering modifications.
  13. There is evidence that the borrower provided or made efforts to provide completed documentation necessary to qualify for a modification within the period such documentation was required to be provided by the governing modification program and the servicer denied the loan modification in contravention of the terms of the governing modification program or the servicer’s stated policy covering modifications
  14. The servicer initiated foreclosure or completed a foreclosure sale without providingadequate notice as required under applicable state law
  15. The servicer foreclosed on or sold real property owned by an active military servicemember in violation of SCRA.
  16. The servicer did not lower the interest rate on a mortgage loan entered into by a military servicemember, or by the service member and his or her spouse jointly, in accordance with the requirements of SCRA.
  17. The servicer failed to honor a borrower’s bona fide efforts to redeem a sale under applicable state law during the redemption period.
  18. The borrower was protected by the automatic stay under the bankruptcy code and a courthad not granted a request for relief from the automatic stay or other appropriate exceptionunder the bankruptcy code.
  19. The borrower was making timely pre-petition arrearage payments required under an approved bankruptcy plan and was current with their post-petition payments.
  20. The borrower purchased a payment protection plan; was or should have been receiving benefits under the plan; and those benefits were not applied pursuant to the contract.14
  21. The servicer was not the proper party, or authorized to act on behalf of the proper party,under the applicable state law to foreclose on the borrower’s home, and this resulted in or may result in multiple foreclosure actions or proceedings.22. The servicer failed to comply with applicable legal requirements, including those governing the form and content of affidavits, pleadings, or other foreclosure-related documents, where such failure directly contributed to: (a) the borrower paying fees,charges, or costs, or making other expenditures that otherwise would not have been paid or made; or (b) the initiation of a foreclosure action or proceeding against a borrower who otherwise would not have met the requirements for initiating such an action

Add details and documents that are specific to your case.

Don’t neglect other issues; escrow manipulation, misapplication of payments, and the recording/use of false/fraudulent/questionable/fabricated documents for the purpose of foreclosing.

Quote any applicable state statutes (ie: notarization procedures, felony recording false property records) that apply.

From the same Congressional hearing is full testimony of Alys Cohen from the National Consumer Law Review which provides more insight and pitfalls of the process here. A warning quote from her testimony may provide guidance on adding written language to the application that states one is explicitly refusing to waive rights in exchange for any available relief.

The consent orders and the foreclosure review process as enunciated to date lack the rigor and breadth to ensure that homeowners are protected during the review process. The process may also be affirmatively harmful. Homeowners could be required to waive their rights in exchange for any available relief. Homeowners may be discouraged from pursuing other avenues of saving their homes by their misplaced reliance on this process. If so, homeowners could ultimately lose their homes in exchange for the uncertain and limited compensation provided under the foreclosure reviews.

From the US Senate Banking Committee site on the December 13, 2011 hearing:

Helping Homeowners Harmed by Foreclosures: Ensuring Accountability and Transparency in Foreclosure Reviews

Housing, Transportation, and Community Development

Tuesday, December 13, 2011
02:30 PM – 04:30 PM
538 Dirksen Senate Office Building

VIDEO OF HEARING [click here to view archive webcast]


Met in OPEN SESSION to conduct a hearing entitled “Helping Homeowners Harmed by Foreclosures: Ensuring Accountability and Transparency in Appeals.” The witness on Panel I will be: Ms. Julie Williams, First Senior Deputy Comptroller and Chief Counsel, Office of the Comptroller of the Currency. The witnesses on Panel II will be: Ms. Alys Cohen, Staff Attorney, National Consumer Law Center; Mr. David Holland, Executive Vice President, Rust Consulting, Inc.; Mr. Paul Leonard, Vice President of Government Affairs, Housing Policy Council of the Financial Services Roundtable. Additional witnesses may be announced.


Panel 1

  • Honorable Julie Williams [view testimony]
    First Senior Deputy Comptroller and General Counsel
    Office of the Comptroller of the Currency

Panel 2

  • Ms. Alys Cohen [view testimony]
    Staff Attorney
    National Consumer Law Center
  • Mr. David Holland [view testimony]
    Executive Vice President
    Rust Consulting, Inc.
  • Mr. Paul Leonard [view testimony]
    Vice President of Government Affairs
    Housing Policy Council of the Financial Services Roundtable
  • Dr. Anthony B. Sanders [view testimony]
    Professor of Finance
    George Mason University School of Management
  • Ms. Ann M. Kenyon [view testimony]
    Deloitte & Touche LLP
  • Mr. Konrad Alt [view testimony]
    Managing Director
    Promontory Financial Group, LLC

The OCC Press Release from Nov 2011 on the Independent Review process with links & phone numbers is here.

Dec 15, 2011 National Consumer Law Center press release demanding the reviews be removed from the OCC and taken over by the Consumer Financial Protection Bureau here.

Please keep us updated. We are very interested in tracking and reporting about this process.


20 Responses to “Independent Foreclosure Review | Adam Levitin – More Rot in the OCC Foreclosure Reviews”
  1. Dustin peterson says:

    It is a big joke, got the check. Wrongful foreclosure ya get 300 dollars. The foreclosure will remain on your credit report they won’t help with that. Buying our first house was a giant mistake but the $300 dollars really covers the higher rates we gotta pay and that we couldn’t buy another home forced to rent. Thanks Feds.

  2. kristy says:

    If haven’t received your check and you received a postcard stating 4-8 weeks. You can call rust consulting and they’ll say it hasn’t need mailed. Ask for a supervisor, they will in turn let you know if it’s really been mailed. I did it today, first they said no, then asking for a supervisor they told me they sent it out on Friday April 19, 2013. My servicer was Bank of America. 😀 good luck. If it comes this week I’ll be happy with any amount, I never believed I’d ever see a dime back.

  3. Theresa Dotson says:

    I received your postcard today saying that I ” may receive payment ” for my home of 20 years that was stolen from me while I was trying to get a loan mod. I was working on the loan mod for over a year. Citibank kept losing my paper work and I had to send it over and over again. Five days after my house was forclosed on, I was APPROVED for the loan mod….How do you put a price on that???

    I have lost everything. My home of 20 years, my job, my car, my health insurance…how do you put a price on that???

    My son Joshua, is autism. His world has been ripped tight out from under him! Joshua was at our home when a police officer came to our door and told him that we had to move. He fell apart and has had anxiety attacks since then… do you put a price on that???

    I lost my job because I miss too many days because I had to take car of my son. Because I lost my job, I lost my health insurance….because I have no health insurance, my son does without!
    How do you put a price on that?

    I would like to know who and how the price the price of our lives was detirmed. How much money does someone get when they have lost everything??. Why wasn’t Citibank stopped before we ended up on the street? I went to court, showed the judge the paperwork that showed that Citibank was stealing my house. The judge listened to everything I said, then told me I had 10 days to get out of my house!! The lawyer for the bank was 30 minutes late to court that day. The judge set my case aside until the lawyer got to the courthouse!!! If I was 30 minutes late that day do you think the judge would have waited for me to show up??? When the lawyer did show up the judge asked him if he wanted to charge me a deposit to stay in MY OWN HOME for the 10 days!!!

    My son and I live in a 400 sqft apartment over my father’s garage. How do you put a price on that??? I am a 51 year old single mother that can’t support her special needs son. I am being supported by my 71 year old mother and my 74 year father, both whom are living on SS. how the Hell do you put a price on that !!!!!

    Please tell me what the lucky amount of money will be assigned to my son and I for losing everything? How much does the bank does the bank feel we deserve for being tossed out on the street and losing everything? What about my son who can’t even go to school everyday because he is afraid, of everything. Citibank and Fannie Mae has ruined our lives! CAN SOMEONE PLEASE TELL ME HOW YOU PUT A PRICE ON THAT???? How do I make my son feel safe again? How can I ever find my own place to live again after my home has been forclosed on, my car been repoed and my job has been lost and my son is too terrified to be alone for more that a minute at a time????

    Please tell me what happens now!
    Theresa Creel Dotson
    663 S.lakeshore drive ( above the garages)
    Louisa Virginia 23093
    540-968-0123 ( my parents phone number)
    Sent from my iPad

  4. Tony Toner says:

    The OCC, Independent Foreclosure Review & Bank of America all conspired to prevent customers from applying for this program. I had to request the application 3 TIMES and it never arrived. The calls from B of A concerning my complaint were not taken seriously as the callback number they provided went nowhere. All of these organizations want to send the customer to a ‘cul de sac’ where they cannot get through or accomplish anything. Crooks!

  5. The EMC mortgage company duked me out of many dollars over a six yr. period. We had to put our back payments into bankruptcy in 2005. The payments were made accordingly and then the problem started. Behind $12,000, refused to lower interest rate of 9%, continued to pound us about money. Refinanced rental house to get $10,000 and make a payment plan for the rest, but no matter what money was given to them,it was never catching us up. The lone was paid up to date, and I sent them the breakdown of pmts, to prove this, but they still kept saying the loan was behind. EMC went up on the escrow for the second time, but the taxes or insurance never changed. I gave up trying to pay for this money pit, I could not do it anymore, so they took my house. The people of EMC mortgage never new what was going on. I would get a different person everytime, and no one would follow through with anything. I was very frustrated to say the least. I would very much appreciate the review board looking into this loan. I personally think that something was very wrong. Thank you Tamara Sisson

  6. debra says:

    just another dog and pony show.. somehow we need to find out the data base of all these people affected and file a class action law suit. that is the only way.

  7. lvent says:

    The proof of the rot is in the rotten economy because of what these crooks did..

    • lvent says:

      The US GOVERNMENT is allowing these criminals to BANKRUPT THE AMERICAN PEOPLE….

      • lvent says:


      • lvent says:


      • lvent says:


  8. Ace says:

    Let’s see what the OCC actually says…

    Initial Inquiry to OCC: 2/2010
    Initial Inquiry Response: 3/2011 (13 Months? That spoke volumes to me.)

    QUOTE…”The OCC contacted the bank, which responded to us regarding your concerns. The bank indicated your loan is no longer under review for retention options as you failed to submit documentation.”

    Are you frigging kidding me? I sent as many as 30 letters requesting assistance. Yet, NO investigation to say the least on the OCC’s part? Does the OCC really want to review my documentation? No, the OCC just asks the banksters what evidence they have on hand against the homeowner in question, Were any documents from the Bankster or Homeowner reviewed by the OCC? Obviously NOT. If the docs in question from the homeowner were reviewed by legitimate OCC, OTS, DOJ, FBI, SEC FRAUD Investigators we wouldn’t be here PERIOD. Case Closed? BULLSHIT.

    Is this an OCC SCAM/Coverup? YES
    Gov’t Institutions Bought, Owned & Sold? YES
    By Whom? Banksters.

    Wake up Sheeple Wake Up.

    • Ace says:

      How many financiers do you think ended up in jail after America’s Savings and Loans scandals? The answer can be found in a fascinating, old report from the US Department of Justice.

      According to some of its records, between 1990 and 1995 no less than 1,852 S&L officials were prosecuted, and 1,072 placed behind bars. Another 2,558 bankers were also jailed, often for offenses which were S&L-linked too.

      How Many of today’s much wealthier financiers banksters and swindlers are in jail for their disastrous deeds?

      ZERO & Sickening to America

  9. Passant Debovier says:

    Inquire about alleged corruption:

    Office of the Comptroller of the Currency
    Communications Division
    Washington, DC 20219
    (202) 874-5000

  10. Frank Dugan says:

    The OCC is corrupt to the core, while there may be an employee or two with sufficient awareness, enlightment, make no mistake that their management answers to corporate power. A bunch of pathetic, degenerate corrupt fools playing the role of “Good German”. I wouldn’t wish their families be tossed upon the street for any trumped up bunch of lies, but they enable,abet, ignore Bank criminality. It is this social debt and their cowardice that they will carry with them for the rest of their lives.

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