OCC’s John Walsh Attempts Whitewash of Servicer Abuse

By: David Dayen

In a Senate Banking Committee hearing just now, Acting OCC head John Walsh gave an update on the investigation into servicer practices, which was the subject of several news reports today. Here, in essence, was what he said:

• “Federal banking agencies have concluded investigations on servicers found critical deficiencies and shortcomings that violate state and local foreclosure laws.”

• However, they found that in most cases, loans were seriously delinquent and that the servicers had the proper documentation and the legal standing to foreclose.

Let’s stop right there. This investigation started at the end of 2010. It would be impossible for them to look at every single delinquent loan, which number in the millions, assess the situation for all of them, assess all the documentation, and conclude that most of the cases were operating on a generally legal basis. The courts certainly haven’t found that, and they had many more months to make the assessment. This is a ridiculous statement that cannot possibly be backed up with comprehensive evidence. In fact, the Wall Street Journal says that the review sample was 2,800 foreclosures. Out of millions. And bank regulators who may not be well-versed in specific real estate law in every state made the investigation.

I highly suggest you check out the rest of this article here…

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