Contact: Sharon Lee, (212) 669-3747 November 18, 2010
NEW YORK, NY – New York City Comptroller John C. Liu stated the following in response to questions about the Congressional hearing today on irregularities in the foreclosure process:
“Mass foreclosures, due in part to widespread irregularities, have hurt homeowners, mortgage investors, and regional economies. Bank shareholders are also at risk.
“Where are the bank directors in this enormous mess? Their silence is deafening, particularly when management continues to sweep the problem under the rug as mere ‘technical glitches.’
“The Directors are ultimately responsible, not only for compliance, but for ensuring sound business practices. They must serve their shareholders and must fix the root problems, including managing perverse financial incentives in the current business model.
“Since July, we have warned that flawed bank procedures are forcing New Yorkers from their homes and hurting our economy. It is now clear that foreclosure and mortgage irregularities expose shareholders to substantial liabilities and loss. This would hurt our retirees and taxpayers.”
Earlier this week, Comptroller Liu, on behalf of the trustees of the New York City Pension Funds, called on directors at Bank of America Corporation (NYSE: BAC), Wells Fargo & Company (NYSE: WFC), JPMorgan Chase & Co. (NYSE: JPM) and Citigroup Inc. (NYSE: C) to conduct an independent audit of their banks’ mortgage and foreclosure practices in order to prevent a recurrence of such mass foreclosures. The four banks are the largest mortgage servicers in the country representing 56 percent of the nation’s $10.64 trillion mortgage industry.
The City Comptroller serves as the investment advisor to, custodian and trustee of the New York City Pension Funds. The New York City Pension Funds are comprised of the New York City Employees’ Retirement System, Teachers’ Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund and the Board of Education Retirement System. The New York City Pension Funds hold a combined 137,864,102 total shares in Bank of America Corporation (NYSE: BAC), Wells Fargo & Company (NYSE: WFC), JPMorgan Chase & Co. (NYSE: JPM) and Citigroup Inc. (NYSE: C) for a combined asset value of $1,762,855,174.14 as of 11/12/2010.
SOURCE: New York City Comptroller