If you thought the banks got off lightly with the robosigning settlement, Morris Morgan is here to tell you otherwise.
Speaking before the Committee on Oversight and Government Reform Monday at a hearing about housing, Morgan, the deputy controller for Large Bank Supervision at the Office of the Comptroller of the Currency, reminded committee members “there are no caps or limits to the amount of compensation that will be paid out or remediated by the servicers.”
The OCC required servicers to retain independent consultants to conduct reviews of foreclosure activities from 2009 and 2010. In his testimony, Morris said there were two parts to the review: “a request for review process for borrowers who believe they were financially harmed by defective servicing and foreclosure practices, and second, a file review.”
He said as of last week, more than a quarter million files were scheduled for review and he expected the number to increase. The OCC has been sending letters – about 4.3 million of them – to borrowers letting them know how they can request an independent review. The request process started Nov. 1, and will continue through July 31.
“When independent consultants find errors, misrepresentations, or other deficiencies, the next step is to determine if those errors caused financial injury, then recommend remediation,” he said.
While the OCC has provided guidelines for recommended compensation for “certain categories of harm,” this is where the “no caps or limits” bit comes into play. The banks will pay for every bit of the robo-signing saga, even if the settlement has already been made final, because the two payouts are two different things.
“We have been in regular communication with the Justice Department and other federal agencies for more than a year to ensure our enforcement actions did not interfere with, and were complementary to, actions required by a national settlement,” Morgan said.
This message may have been drowned out between the shouts of demonstrators protesting against the presence of Rep. Darrell Issa, R-Calif., the chairman of the committee who has been embattled in controversy for such things as accepting donations from some of the big banks employee PACs, his role in shutting down ACORN and holding an all-male panel on birth control.
This led members of Occupy Wall Street, United New York, New York Communities for Change and the Working Families Party to shout things such as “Darrell! Issa! Is the One Percent!"
Representative Edolphus Towns (D-N.Y.) sought to contain some of the calamity, telling Issa, “Despite the reception that you received, we're delighted to have you, there's no doubt about it.”
He later sent out a statement reiterating the purpose of the meeting, and calling attention the good it aimed to do for homeowners.
“Today’s hearing is about holding banks and mortgage servicers accountable and getting to the bottom of how we can help those who have been most severely impacted by this crisis,” he said in the statement. “Brooklyn is at the epicenter of this foreclosure crisis, and has been one of the hardest hit areas in the country. The very sentiment and anger that was expressed today is why I brought the Committee to Brooklyn, and will remain committed to getting answers from the banks.”