Looking back, the housing industry is totally Scrooged

Looking back, the housing industry is totally Scrooged

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Lawmakers urge regulators to unseal foreclosure reviews

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A group of 12 members of the House of Representatives sent a letter to federal regulators Wednesday, urging them to make public the upcoming review of loan files at the 14 largest mortgage servicers. Rep. Maxine Waters (D-Calif.) led the House letter, and an identical one was sent from a group of senators, led by Sen. Robert Menendez (D-N.J.). In April, servicers signed consent orders with the Office of the Comptroller of the Currency, the Federal Reserve, and the Office of Thrift Supervision, requiring these banks to correct mishandled foreclosures. The consent orders require new processes and oversight be put in place, but they also mandated a review, conducted by an approved third party, of the servicers' loan files. Regulators conducted their own review of roughly 2,800 foreclosure cases — 200 per servicer — and found evidence of a widespread problem. The OCC previously said it would release a report on the findings but would not disclose individual bank statistics. Lawmakers requested the regulators disclose the servicers' contracts with the consultants they hire to conduct the review, the specific action plans servicers will take to correct the problems, the foreclosure reviews and any other plans or polices these companies submit as part of the process. Servicers submitted action plans and the engagement letters last week. "We believe it is essential that the items listed above be made available to the general public or the public will lack confidence in both the foreclosure review process and results," the letter reads. "This is particularly the case because the foreclosure reviews are being performed by consultants who are chosen by the mortgage servicers themselves, and those consultants often have conflicts of interest in that they are not prohibited from getting future business from those same mortgage servicers." The OCC said it would not mention which banks had the most problems, because such a disclosures would violate confidential bank supervisory information. "We understand concerns about not revealing mortgage servicers' proprietary information, but also believe that some disclosure can be done on a bank-by-bank basis without compromising proprietary information," the lawmakers said. Write to Jon Prior. Follow him on Twitter @JonAPrior.

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