Bank of America Foreclosure Reviews: Why the OCC Overlooked “Independent” Reviewer Promontory’s Keystone Cops Act (Part VB)

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Bank of America Foreclosure Reviews: Why the OCC Overlooked “Independent” Reviewer Promontory’s Keystone Cops Act (Part VB)

This post continues our discussion of the role of “independent” foreclosure review consultant Promontory Financial Group. Here we focus on what happened, or more important, didn’t happen in Promontory’s conduct of the reviews, and how that contrasts with the staggering fees the firm is widely believed to have earned.

David Einhorn has a saying about the companies that he has shorted: “No matter how bad you think it is, it’s worse.” Promontory’s and the OCC’s performance on the foreclosure reviews epitomize this dictum.

As much as the foreclosure reviews were widely expected to be a charade, given the conflicted roles of supposedly independent review firms like Promontory, there was no reason to expect the reviews to also be an ineptly managed, costly fiasco. Promontory’s inability to man and adequately oversee the project also meant what little useful work was accomplished was done overwhelmingly by contractors and temps, who were far enough removed not to have gotten the wink and nod that no borrower harm was to be found. So individuals who have no lasting loyalty to Promontory and Bank of America, and whose confidentiality agreements are likely inoperative due to defective drafting, public policy exceptions to these agreements, and enhanced whistleblower protection under Dodd Frank, have unearthed widespread evidence at all of Promontory’s clients on the independent foreclosure reviews of borrower harm. No wonder the OCC rode to the rescue to shut the reviews down.

It is hard to overstate how badly the project at Bank of America and other sites was operated. We have spoken to multiple contractors who worked for Promontory on its OCC foreclosure reviews for PNC (Promontory was acting as “independent” consultant to Bank of America, Wells Fargo, and PNC). They also have knowledge of the process at Bank of America because some contractors moved between the Bank of America and PNC engagements and compared notes with their colleagues.

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One Response to “Bank of America Foreclosure Reviews: Why the OCC Overlooked “Independent” Reviewer Promontory’s Keystone Cops Act (Part VB)”
  1. marilyn says:

    According to everything I have read it appears the average payout will be $250. To think this will help ease the pain of an injured homeowner is crazy. That may pay for a weeks worth of groceries not for the cost of losing a home. The independent foreclosure review only lined the pockets of the consultants costing almost half the money available to compensate those who lost their homes….while the consultants raked in billions!

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