Lawmaker, Carolyn Maloney, Seeks Details on Foreclosure Reviews
Lawmaker Seeks Details on Foreclosure Reviews
The high cost of reviewing foreclosures at big banks has ignited an inquiry by one member of Congress.
Carolyn Maloney, a New York Democrat who is a member of the House Financial Services Committee, has asked the federal regulators who oversee foreclosure reviews to provide details about the independent contractors who examined borrowers’ cases. The contractors reportedly received more than $1 billion in fees, which ultimately led to a $3.3 billion cash settlement for borrowers.
Regulators required the foreclosure reviews in 2011 after evidence emerged of rampant improprieties by the banks that serviced troubled loans.
The audits were supposed to cover some four million loans that entered foreclosure during 2009 and 2010.
In a letter sent late Thursday to Thomas J. Curry, the comptroller of the currency, and Ben S. Bernanke, the chairman of the Federal Reserve, Ms. Maloney asked for copies of the contracts awarded to the consulting firms by the 12 banks involved in the review program.
She also asked for information about how the consultants’ fee structures were determined and what role officials with the Fed and comptroller’s office played in those determinations.