Oversight Committee Requests Briefing on Potential Independent Foreclosure Review Process Settlement

WASHINGTON – The Chairman and Ranking Member of the House Committee on Oversight and Government Reform, Reps. Darrell E. Issa and Elijah E. Cummings, sent a joint letter to Federal Reserve Chairman Ben Bernanke and Comptroller of the Currency Thomas Curry requesting a briefing as the agencies finalize a potential new settlement with 14 major mortgage servicing companies.  Recent news accounts report that a potential settlement now under consideration could replace the Independent Foreclosure Review process, which was ordered in 2011 after federal regulatory agencies identified improper actions during loan servicing and processing by mortgage servicers.

“In light of these recent press reports suggesting that a settlement may replace the Independent Foreclosure Review process, we respectfully request a staff briefing prior to the conclusion of the reported settlement agreement,” the Members wrote.  “We would like more information about how the potential settlement amount is to be determined in light of potential wrongdoing identified to date, how such aid may be distributed and in what form, and what may happen to homeowner files that are still awaiting review.”

In 2011, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the then-Office of Thrift Supervision issued a report identifying “critical weaknesses” in the foreclosure practices of these 14 mortgage servicers, resulting in “unsafe and unsound practices and violations of applicable federal and state law and requirements.”

The Oversight Committee has been investigating allegations of improper foreclosures and held three hearings on foreclosure and servicer abuses during the 112th Congress.