OCC Misses Another Conflict of Interest: Foreclosure Review Outreach/Payment Processor Rust Consulting Owned By Residential Real Estate Player Apollo, Being Sold to VC Arm of Citigroup
It appears that the Office of the Comptroller of the Currency and the Fed dropped the ball yet again on vetting firms involved in the Orwellianly-named Independent Foreclosure Review (IFR) for conflicts of interest. Michael Olenick’s expose on Allonhill, one of the “independent consultants” hired by Wells Fargo, led to Allonhill’s role being curtailed considerably.
But there’s no way to curtail the role of Rust Consulting, a firm that has been central in the Independent Foreclosure Reviews virtually from their onset. Rust was the firm that servicers engaged to handle the initial mailings to borrowers eligible for a review. The assumption of the authorities appears to have been that Rust was merely doing such low level stuff that it didn’t need to be checked; when I called the OCC to ask if the firm had been screened for conflicts of interest, the PR staffer who returned my call reacted as if the question was off-base (he said he’d get back to me with an answer the following day and never did).
But as both unhappy Congressmen and even more unhappy homeowners have found, Rust is playing a substantive review in the IFR, and one that has not stood up well to close scrutiny. Now it is bad enough that its independence is already subject to question, in that, like the “independent” consultants, it was hired by and paid for by the servicers. But it is even more troubling that its owners have deep ties and involvement in the residential real estate business, and Rust’s parent is being sold to the venture capital arm of Citigroup, which is also subject to the IFR.