(2 pm. – promoted by ek hornbeck)
The Obama administration under the guise of trying to look like they are helping the 99% with the massive problem of the housing collapse, the banks are still let off the hook for fraud. It is crystal clear that the financial good old boys are being protected by this administration.
by Gretchen Morgenson
So many were skeptical when the Office of the Comptroller of the Currency announced yet another program in April. This one was intended to provide reparations to homeowners who’d been hurt financially by foreclosure abuses at banks.
As the details trickle out, the program looks like more of the disappointing same. “This is just the next program that’s getting people’s hopes up,” said Alys Cohen, staff attorney at the National Consumer Law Center in Washington. “Not only will it not help people, it could easily harm them.”
The program arose out of a regulatory review in late 2010 of loan servicing practices at the nation’s largest banks. The review followed the robo-signing scandal that erupted after consumer lawyers – not regulators, mind you – identified numerous apparent forgeries and other improper foreclosure documents filed with courts by banks and their representatives. [..]
Some of the problems were aired at a Senate subcommittee hearing on Dec. 13. Three Democrats – Robert Menendez of New Jersey, Jeff Merkley of Oregon and Jack Reed of Rhode Island – expressed doubts about the program to Julie L. Williams, chief counsel at the comptroller’s office. The senators were especially vocal about the potential for conflicts of interest among the consultants hired to conduct the reviews. [..]
Michael Olenick, a specialist in mortgage research, said he spotted a conflicted consultant after one hour of digging. Allonhill, a smallish firm appointed by Aurora Bank, a mortgage servicer, is headed by Sue Allon, whose previous small firm acted as credit risk manager in a 2003 mortgage pool for which Aurora oversaw the loans’ servicing. The prospectus on that deal noted that Murrayhill, Ms. Allon’s former firm, would “monitor and advise the servicers with respect to default management of the mortgage loans.” It also said that Murrayhill would make recommendations to the servicers regarding delinquent loans.
Now, under the comptroller office’s program, Ms. Allon’s firm may be analyzing the treatment of borrowers on whose loans it acted as credit risk manager. “This conflict is so deep and so obvious, how could anybody have missed it?” Mr. Olenick asked.
This is yet another Obama Administration “pretend we are helping ordinary citizens when we are in fact helping the banks” scheme. The most damning tidbit comes late in the article, that borrowers may (I’d assume will) be asked to sign releases that are far broader than the matters under examination. In other words, to get whatever relief the OCC provides, borrowers may unwittingly give up rights worth far more:
For example, participants in line to get remuneration may be asked to give up their rights to defend themselves if they get into financial trouble again.
“This process is not meant to fix the original lending practices, so people need to hang on to their right to challenge the original loan later,” she [Cohen] said.
And after all that, the homeowner could still lose their home. This didn’t surprise Alys Cohen who said, “This is the O.C.C . that we’re talking about, [,,] It has a long record of favoring banks over homeowners.”