Foreclosure Review- Panned by Government Accountablity Office

Posted by kevin on April 5, 2013 under Foreclosure Blog | Comments are off for this article

Earlier this week, I blogged about the Chairperson of he SEC going to Promontory, the audit company that has come under fire because of the botched Independent Foreclosure Reviews. Yesterday, the Government Accountability Office (GAO) faulted the Office of the Comptroller of Currency (OCC) and Federal Reserve for not insuring that banks were using consistent methods to determine which foreclosure files to scrutinize for possible errors.

Auditors including Promontory Financial Group, rather than following through on the audits, pushed for settlement. The settlement is listed at $9.3 billion, but like the so-called $25 billion settlement, the lenders are putting up only a small fraction of the settlement in hard cash. The rest are a complicated scheme of credits that defy common sense. More importantly, by abandoning the audits, the questions becomes, how do you know who is entitled to settlement proceeds and how much?

The GAO did not focus on these practical issues, but just said that the auditors should have at least had the same checklist for their audits- otherwise people with the same issue could get a different result. GAO said that the buck stopped with OCC and the Fed. I guess they dropped the buck.

The borrowers are the people. And the people get the short end when government takes care of the big guys. Our greatest President (or at least in the top 2) has been in the press a lot over the last couple of months because of the Spielberg movie. I wonder what Mr. Lincoln would think of this government of the people, by the people, for the people?

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