Washington Law Firm Sues Bank Regulator Over Foreclosure Reviews

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Washington law firm sues bank regulator over foreclosure reviews

WASHINGTON (Reuters) – A top Washington law firm is suing regulators to hand over information about how it selected consulting firms to participate in a multibillion-dollar review of banks’ past foreclosures.

The reviews, mandated by regulators in 2011 after widespread foreclosure shortcuts came to light, proved slow and expensive, and earlier this year 13 banks agreed to pay $9.3 billion to end them and compensate foreclosed borrowers.

But in a lawsuit in federal court in Washington, D.C., the law firm Williams & Connolly revisited the original reviews.

It is seeking documents explaining how the Office of the Comptroller of the Currency defined “independent” in its requirements for mortgage servicers to hire “independent consultants” to conduct the reviews.

The law firm declined to identify the client on behalf of which it filed the complaint.

It is possible that a consulting firm that lost out on the review contracts is behind the suit.

An OCC spokesman declined comment.

The lawsuit adds scrutiny to the foreclosure review, which had already been criticized by lawmakers as a windfall for consultants with little benefit to wronged homeowners. Critics have also said the resulting settlement may not get relief into the right hands.

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