Do you think you understand just how badly we’re all getting screwed by the banks and their teams of lawyers and consultants? You don’t even have a clue……
I’ve previously reported on the travesty that is the GMAC Bankruptcy and how consumers and taxpayers continue to be hosed…but that’s just one of many examples….
Instead of righting a large-scale wrong, however, the “lookback” reviews have become nearly as controversial as the original servicing blunders. Consumer advocates have blasted the reviews as lacking in independence. They allege that regulators have allowed banks to subvert the program by choosing their reviewers, weighing in on whether borrowers were harmed and even appealing consultants’ decisions.
Obscured in the feuding is an issue potentially even more troubling than the questions about the consultants’ independence: the cost of running the reviews has spiraled out of all proportion to their potential benefits.
Designed to compensate wronged homeowners, the review programs are almost certain to deliver several times more cash to the consultants overseeing them. Bankruptcy filings by ResCap, the former GMAC mortgage servicer slated to be acquired by Ocwen, state that the company will pay consultant PricewaterhouseCoopers $12,500 to review each of 20,000 loans for a total cost of a quarter-billion dollars. Yet ResCap expects to pay only $35 million to $60 million to harmed homeowners.