Today, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, released the following statement in response to a Government Accountability Office (GAO) report on banking regulators' review of foreclosure abuses:
"This report raises significant concerns not only about mortgage servicing companies that illegally foreclosed on American families, but about the federal regulators who were supposed to investigate what happened. Instead of holding banks fully accountable for their widespread abuses, the regulators heaped insult on top of injury with a poorly designed review that lacked sufficient monitoring, and they are compounding these deficiencies by continuing to withhold information about the abuses that were identified."
The report found that the Federal Reserve and the Office of the Comptroller of the Currency (OCC) failed to adequately coordinate a review of foreclosure abuses at the nation's largest banks due to inconsistent guidance to consultants and broad breakdowns in communications, among other things. The report also noted that "limited communication with borrowers and the public adversely impacted transparency and public confidence."
On January 31, 2013, Cummings and Senator Warren launched a joint investigation of the settlement ending the Independent Foreclosure Review (IFR) process. The Members requested that the Federal Reserve and OCC provide documents and information relating to mortgage servicer abuses identified as part of the IFR. In their letter, they stated that regulators' lack of transparency about the scope of the harms found impedes public confidence in the settlement, which is needed to speed recovery of the housing markets.