A ranking member of the House Committee on Oversight and Government Reform is pushing for a legislative package that would create an independent monitor to oversee all payouts tied to the national foreclosure settlement.
This monitor also would be charged with checking up on the Office of the Comptroller and the Federal Reserve.
Both prudential regulators became the subject of scrutiny in January when they agreed to halt a national probe of foreclosures to speed up the compensation distributed to borrowers harmed by foreclosures back in 2009 and 2010.
Instead of allowing consultants to continue the expensive and time-consuming probe, the OCC and Federal Reserve halted the reviews and agreed to sign a settlement with 13 servicers, stipulating a payout of $9.3 billion – with more than $3 billion set aside for individual borrowers.
Rep. Elijah Cummings, ranking member of the House Committee on Oversight and Government Reform, introduced the Mortgage Settlement Monitoring Act of 2013 on Thursday to gain access to key data on borrowers and servicers.
The goal of the bill is to create an independent monitor appointed by the president to review all funds paid out by mortgage servicers.
The monitor also would ensure all parties to the settlement are compliant with its terms.
In addition, the monitor would make quarterly reports to Congress detailing the methods used by regulators and servicers to provide relief as well as information on how aid is granted.
Cummings also wants the monitor to provide data broken out by mortgage servicer, including information on any credits servicers receive for providing compensation to borrowers.
The applying of credits to servicers for offering aid became a subject of controversy at a recent Senate Banking Committee hearing when the National Fair Housing Alliance suggested banks are receiving credit for aiding borrowers in an amount equal to a full loan balance when in fact servicers are only writing down a portion of the mortgage.
The settlement also captured negative press when a portion of the early checks mailed out to borrowers bounced. Although the situation was quickly remedied, it became another black eye for the settlement deal.
Rep. Cummings and Sen. Elizabeth Warren, D-Mass., have been pushing for more information on the independent foreclosure review and the subsequent settlement since January.
Cummings and Warren sent a letter to the Federal Reserve earlier this year, criticizing regulators for withholding certain settlement records from Congress.