Foreclosure Reviews: Exorbitant for Banks, Gold Mines for Consultants

Foreclosure Reviews: Exorbitant for Banks, Gold Mines for Consultants

In the wake of the financial crisis, banks mishandled foreclosures on such a scale that regulators stepped in. Led by the Office of the Comptroller of the Currency, they ordered banks to hire independent outsiders to identify homeowners who were wrongly foreclosed on and to provide compensation.

Instead of righting a large-scale wrong, however, the “lookback” reviews have become nearly as controversial as the original servicing blunders. Consumer advocates have blasted the reviews as lacking in independence. They allege that regulators have allowed banks to subvert the program by choosing their reviewers, weighing in on whether borrowers were harmed and even appealing consultants’ decisions.

Obscured in the feuding is an issue potentially even more troubling than the questions about the consultants’ independence: the cost of running the reviews has spiraled out of all proportion to their potential benefits.

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One Response to “Foreclosure Reviews: Exorbitant for Banks, Gold Mines for Consultants”
  1. Sarah Furgensen says:

    The idea of a foreclosure review is laughable. We’d assume our court system would provide capable review when people are hurled out of their housing. However, that assumption vanished as soon as a homeowner discovered that Banks or Thrifts could flat out steal, walk away from the scene of the crime, all the while merrily chanting “contract law” and “moral hazard”, and receive bi-partisan support in doing so.
    What won’t be reviewed (and still must be) is that Banks gave loans to people who could not afford them. Notice that most of the propaganda, whether it be from the MoveOn groups or other liberal tanks, to their friends on the so-called conservative other side, refuses to address what Black and others have lucidly detailed.

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