U.S. Senator Elizabeth Warren and Representative Elijah Cummings want bank regulators to produce documents to show what led them to reach settlements this month with 13 mortgage servicers for faulty foreclosures.
“It is critical that the OCC and the Federal Reserve disclose additional information about the scope of the harms found to establish confidence in the sufficiency and integrity of the settlement,” the lawmakers, both Democrats, wrote in a letter dated today to Fed Chairman Ben S. Bernanke and Thomas Curry, head of the Office of the Comptroller of the Currency.
Warren and Cummings asked the regulators to turn over documents outlining how borrowers were harmed by foreclosure missteps of 2009 and 2010, as well as demographic details on the borrowers, who will get compensation from more than $9 billion in settlements with servicers including JPMorgan Chase & Co. and Goldman Sachs Group Inc. They are also asking for information on the performance and pay of independent consultants hired by the firms under a 2011 accord replaced by this month’s settlement.
Warren was elected in November to the Massachusetts seat once held by the late Edward M. Kennedy after setting up the Consumer Financial Protection Bureau as a former special adviser to President Barack Obama.
Cummings has served in the House since 1996 and is the top Democrat on the Oversight and Government Reform Committee. The Maryland lawmaker, who criticized the agreement before it was announced, said it could allow “banks to skirt what they owe and sweep past abuses under the rug.”
Warren and Cummings asked that the documents be delivered by Feb. 22. Eric Kollig, a Fed spokesman, and Bryan Hubbard, an OCC spokesman, both declined to comment on the correspondence.
Representative Maxine Waters of California, the ranking Democrat on the House Financial Services Committee, sent a similar letter to the OCC and Fed that said “many questions remain” about the regulators’ settlement ending the case-by-case review of foreclosure missteps. She requested that documents about the review process be made public and that an independent monitor be appointed for the new settlement.
The bulk of the settlement with 13 of the largest mortgage servicers will go toward mortgage assistance for current borrowers, and the remainder will provide direct cash to borrowers foreclosed on in 2009 and 2010, with as much as $125,000 paid to those hurt the worst.
Among firms ordered in 2011 to have their foreclosures reviewed, three haven’t yet settled with regulators: Ally Financial Inc., IndyMac Bancorp’s successor OneWest Bank FSB and EverBank Financial Corp.