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U.S. Audit Cites OCC Lapses in Oversight of Foreclosure Process

The Office of the Comptroller of the Currency underestimated the risks in bank foreclosure practices from 2008 to 2010 and gave examiners a 13-year-old handbook that didn’t address how securitization affects loan documentation, a Treasury Department audit found.

Treasury’s inspector general’s office reviewed the OCC’s work in the years following the onset of the credit crisis. The period was later found to be rife with abusive foreclosure practices including use of fraudulent documentation by servicers. Five major banks, including JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co., settled claims from 49 states and the federal government for $25 billion on Feb. 9.