Cummings Calls for Unredacted Copies of “Engagement Letters” Between Mortgage Servicing Companies and Private Consultants
Washington, DC (Nov. 22, 2011)—Ranking Member Elijah E. Cummings released the following statement today regarding the public release of highly redacted “engagement letters” between mortgage servicing companies and independent consultants they hired to review past foreclosure abuses:
“Although I am encouraged that some information is being made public today, our Committee should issue subpoenas to obtain full, unredacted copies of these documents so we can ensure that homeowners are being fully and appropriately compensated. Six months is too long to wait to conduct oversight of mortgage servicing companies that illegally foreclosed against homeowners.”
Today, the Office of the Comptroller of the Currency released copies of the engagement letters with significant redactions, including the removal of sections regarding past work, actual and potential conflicts of interest, and the procedures available to homeowners to file claims and complaints due to errors, misrepresentations, or other deficiencies in a foreclosure process.
Cummings first asked for full copies of these engagement letters on May 31, 2011, following a report issued by federal regulators finding “critical weaknesses” and “widespread risk” with 14 of the nation’s largest mortgage servicing companies’ foreclosure practices.
The regulators ordered the mortgage servicing companies to hire private consultants to conduct more comprehensive reviews of their foreclosure actions, but the regulators allowed them to propose the terms of the reviews, including the methodology of the reviews, the criteria guiding the selection of cases to be reviewed, and any proposed sampling techniques. Some have criticized this approach for providing insufficient oversight of the banks’ actions.
In their responses to Cummings, the regulators explained that, by law, they cannot produce the full engagement letters until they are legally compelled to do so.
As a result, on October 27, Cummings wrote to Committee Chairman Darrell Issa requesting that he either issue subpoenas for the engagement letters or schedule a subpoena vote for the Committee’s business meeting on November 17, 2011. Issa declined to take either step, stating at the business meeting that he preferred to wait until Thanksgiving to determine whether the engagement letters would be released voluntarily.