Comptroller of the Currency Orders National Banks to Cover Up Foreclosure Scandal
Acting head John Walsh is standing in the way of information that could help desperate homeowners. **You can follow Matt Stoller on Twitter at http://www.twitter.com/matthewstoller
I was rereading some testimony by Mark Kaufman, the Maryland Commissioner of Financial Regulation, on mortgage servicer behavior. He testified this month before the House Oversight Committee on something quite scandalous.
Together with banking commissioners in four other states, our Office of Financial Regulation joined twelve state Attorneys General in the State Foreclosure Prevention Working Group launched under the leadership of Iowa Attorney General Tom Miller in 2007. This group sought to work collaboratively with the mortgage servicing industry and other parties to identify solutions to the myriad of problems we were seeing in addressing the crisis. The group gathered data submitted voluntarily from the largest subprime servicers and published five reports during 2008 to 2010 providing analysis on foreclosure issues and the servicing response. Unfortunately, this data and the related dialogue fell short of its potential as the Office of the Comptroller of the Currency forbade national banks from providing loss mitigation data to the states.
Subprime servicers were willing to hand over data. But national banks were ordered not to provide data on loss mitigation to investigators. It gets worse. Kaufman notes that in Maryland, loan modifications often led to homeowners paying a higher monthly amount after getting their loan modified. When a homeowner asked for help, they got a higher bill. In essence, this is the financial equivalent of having the fire department try to put out a blazing inferno with gasoline.
Check out the rest here…