I will forever remember sitting in a lower Manhattan courtroom while PriceWaterhouseCoopers petitioned for a Quarter Billion Dollars in fees as part of the GMAC bankruptcy. The federal judge denied our motion to have a committee of borrower’s appointed to help ensure borrower’s had a say in the carving up of the GMAC assets based in part on GMAC’s assertions that the Independent Review would provide additional protections and safeguards for consumers. Now that the Independent Review has been scuttled….will the rejection of the Borrower’s Committee be revisited? Right. Got the answer to that one.
But let’s dig deeper into the fraud that was the review….from the New York Times:
Federal banking regulators are trumpeting an $8.5 billion settlement this week with 10 banks as quick justice for aggrieved homeowners, but the deal is actually a way to quietly paper over a deeply flawed review of foreclosed loans across America, according to current and former regulators and consultants.
To avoid criticism as the review stalled and consultants collected more than $1 billion in fees, the regulators, led by the Office of the Comptroller of the Currency, abandoned the effort after examining a sliver of nearly four million loans in foreclosure, the regulators and consultants said.
Because they have no idea how many borrowers were harmed, the regulators are spreading the cash payments over all 3.8 million borrowers “” whether there was evidence of harm or not. As a result, many victims of foreclosure abuses like bungled loan modifications, deficient paperwork, excessive fees and wrongful evictions will most likely get less money.
NEW YORK TIMES
