I can’t believe that I am still amazed by the actions by the banks and their minions.
The first thing that jumped out at me RE the independent reviews was JPMorgan’s choice of firms, Deloitte & Touche.
I guess if I were JPMorgan, I would pick the firm that is most likely to fail to detect the fraud too…
Deloitte Sued for $7.6 Billion in Taylor Bean Collapse
Sept. 26 (Bloomberg) — Deloitte & Touche LLP, one of the so-called Big Four accounting firms, was sued for failing to detect a fraud that allegedly led to more than $7 billion in losses at defunct mortgage lender Taylor, Bean & Whitaker Mortgage Corp.
Deloitte, which audited Taylor Bean’s financial statements from 2002 to August 2009, ignored red flags in the company’s books, allowing the lender’s former chairman, Lee Farkas, to orchestrate a fraud that toppled the company, according to the complaints filed today in state court in Miami. Taylor Bean’s bankruptcy trustee, Neil Luria, and its Ocala Funding unit are seeking more than $7.6 billion in damages.
“Deloitte’s negligence, and willful blind eye, was the fuel without which the looters’ fraud would have sputtered out long before it resulted in the multibillion-dollar debt under which TBW collapsed,” according to Luria’s complaint.
The cases are Luria, Plan Trustee of the Taylor, Bean & Whitaker Trust v. Deloitte & Touche LLP; Ocala Funding LLC, v. Deloitte & Touche LLP, Circuit Court of the 11th Judicial Circuit, Miami-Dade County, Florida.
Independent Foreclosure Review Engagement Letters
Below is the engagement letter submitted by the independent consultant, retained by servicer regulated by the OCC, who will be conducting foreclosure reviews pursuant to the requirements of the April 13, 2011 consent orders. The engagement letter describe how the independent consultants will conduct their file reviews and claims processes to identify borrowers who suffered financial injury as a result of servicer deficiencies identified in the OCC’s consent orders.
Limited proprietary and personal information has been redacted from the engagement letter. Examples of information that has been redacted include, but are not limited to: names, titles and biographies of individuals; proprietary systems information; references to specific bank policy; fees and costs associated with the engagement; and specific descriptions of past work performed by the independent consultants.
Since the acceptance of the engagement letter in September of this year, the independent consultants have further refined and made adjustments to the processes, procedures, and methodologies outlined in the engagement letters in consultation with OCC supervision staff. Therefore, in many cases the review processes being implemented may differ in some respects from those described in the engagement letters because of subsequent coordination with the OCC. In particular, there were a number of changes made to integrated claims process to ensure a single, uniform process among the servicers.
Pursuant to 12 C.F.R. § 4.12(c), the disclosure of the engagement letter at the OCC’s election has no precedential significance.
JPMorgan/Deloitte & Touche letter below…