On April 25, 2013, Representative Elijah E. Cummings, the Ranking Member of the House Committee on Oversight and Government Reform, introduced HR 1706, “The Mortgage Settlement Monitoring Act of 2013” that would oversee the distribution of funds from the Independent Foreclosure Review.

Our blog readers know that ForeclosureHelp has followed the Independent Foreclosure Review closely and we think some additional sunshine into how decisions were made to end the program would benefit Congress and the hundreds of thousands of Americans who have either lost their homes to foreclosure or who have experienced the mortgage modification process with their bank or servicer.  (To see our concerns with the Independent Foreclosure Review, visit our earlier post: “Seven Reasons to Postpone the Independent Foreclosure Review“)

As Senator Elizabeth Warren (D-MA) commented at a congressional hearing earlier this month, it seems contradictory to pay consultants hundreds of millions of dollars to review errors the bank made, then not use that information, and instead, have the banks and servicers decide which category of error the homeowners should be placed into.  The majority of homeowners have already received or will receive a payment of $300 under the revised settlement.

The bill is being co-sponsored by Ranking Members Maxine Waters, George Miller, John Conyers, and Henry Waxman, and Representatives John F. Tierney, Zoe Lofgren, and Jan Schakowsky.

National supporters include the Center for Responsible Lending, the National Consumer Law Center, the National Fair Housing Alliance, the National Association of Consumer Advocates, Americans for Financial Reform, National People’s Action, The Connecticut Fair Housing Center and Consumer Action.

In a press release, Representative Cummings explained: “Mortgage servicers have now admitted that they broke the law by illegally foreclosing on American families and committing numerous other abuses, but regulators refuse to provide even the most basic information about the extent of the abuses that were uncovered,” said Cummings.  “Since federal regulators now plan to rely on these same banks to determine payouts and deliver settlement funds to borrowers, we need an Independent Monitor to bring transparency and accountability to this process.”

According to the same press release, the Act would create a Monitor (appointed by President Obama) to review compliance by all parties, including not only the banks and servicers, but also the Federal Reserve and the OCC.   As a reminder, both the Federal Reserve and the OCC have rebuffed earlier requests from Representative Cummings and Senator Elizabeth Warren (D-MA) to release information about illegal procedures at the bank (like robosigning), suggesting that they are “trade secrets.”

The Monitor would also issue quarterly reports with the following information:

• A description of the criteria and methodology used to determine eligibility for direct and indirect relief, as well as a description of due process protections for recipients;

• Information on borrowers who receive relief, broken down by mortgage servicer and including demographic information, the level of direct compensation for similarly situated borrowers, and the number and amounts of principal reduction loan modifications and other types of borrower assistance;

• Information on the credit given to mortgage servicers for direct and indirect compensation provided to borrowers; and

• A list of instances in which mortgage servicers or regulators fail to comply with the terms of the settlement, and a list of actions taken by the Federal Reserve or the OCC to compel compliance.

If it’s not in the bill, we imagine that homeowners across the U.S. would also like this new monitor to ask a few questions of the Federal Reserve and the Office of the Comptroller Currency, such as:

1) Was there any thought during 2012 about possibly ending the program sooner?   Who ultimately made the decision to end the program in January?

2) What are the financial differences for banks and servicers if the Independent Foreclosure Review had continued as planned and the consultants had decided which category the borrowers should go in?   In other words, was it cheaper for the banks and servicers to discontinue the Independent Foreclosure Review?  If so, how much money did they save?

3) Is there any thought given to clawing back some of the hundreds of millions of dollars spent on consultants, considering most of their work isn’t being used, there were conflicts of interest between the consultants and the banks, there were media reports of some consultants not doing any real work while they were on the clock, and the results of their reviews are apparently “trade secrets” that can’t be made public?

4) What was the rational to only use the 2009-2010 time period for the eligibility qualifications?  Do federal regulators have proof that there was no robo-signing or illegal foreclosures before 2009 or after 2010?

5) Given the evidence that is already public about robo-signing issues and the disorganization at many servicers and banks, why isn’t there a built-in appeal process with the current program, especially for homeowners who have documented the errors that their bank committed against them?

6) Can you explain the exact process for assigning homeowners to a “category of harm?”  On what grounds are banks and servicers confident that they are assigning a homeowner to the correct category?

7) Have there been any conversations about the damage done to credit reports and scores because of improper foreclosures, and what this means for those people and their increased costs for borrowing money?

8) Were any homeowners, housing counselors, or housing advocates asked to join the conversations about this settlement when it was originally designed?  If not, why weren’t they involved in the process since they have the most direct first-hand knowledge of the issues the settlement was designed to address?

We’d love to hear other questions our readers may have for federal regulators, and if readers have experience with the Independent Foreclosure Review, they may want to call their Representative and ask them about this new legislation.

Foreclosure Help is a program funded by the city of San Jose through a HUD Community Development Block Grant and the city of Sunnyvale, and we can directly assist homeowners  and tenants in San Jose and Sunnyvale who are facing foreclosure.  However, we are unable to assist homeowners/former homeowners in other cities and states.  If you need housing counseling, we suggest using the interactive map on HUD’s website.

If you are a homeowner living in San Jose or Sunnyvale and are struggling with your mortgage, please contact ForeclosureHelpSCC, a program funded by the City of San Jose through a HUD Community Development Block Grant and the City of Sunnyvale at (408)-293-6000 or visit us: www.foreclosurehelpscc.org

Our housing counselors can help you evaluate your options, learn more about federal and state programs that may help you with your mortgage issues, and will help you create a plan forward.

Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice. If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org or send us an email: help@foreclosurehelpscc.org.

Si usted es dueño de una casa en San José o en Sunnyvale y están luchando con su hipoteca, por favor póngase en contacto con ForeclosureHelpSCC, un programa financiado por la ciudad de San José y la ciudad de Sunnyvale, al (408) -293- 6000, o visite nuestro sitio: www.foreclosurehelpscc.org.Nuestros consejeros puede ayudarle a evaluar sus opciones, aprender más acerca de los programas federales y estatales que pueden ayudarle con sus problemas de hipoteca, y le ayudará a crear un plan para seguir.

Por favor, tenga en cuenta: Todos los contenidos incluidos en el blog ForeclosureHelpSCC se proporciona únicamente a título informativo y no debe ser considerada como consejo legal o fiscal. Si usted tiene alguna pregunta, por favor no dude en contactarnos a nuestra línea directa: (408) -293-6000, o visite nuestro sitio:www.foreclosurehelpscc.org o envíenos un correo electrónico: help@foreclosurehelpscc.org.

Nếu bạn là một sinh hoạt chủ sở hữu nhà ở San Jose hoặc Sunnyvale và đang đấu tranh với nợ nhà, xin vui lòng liên ForeclosureHelpSCC, một chương trình được tài trợ bởi thành phố San Jose và thành phố của Sunnyvale ở (408) -293-6000 hoặc truy cập trang web của chúng tôi: www.foreclosurehelpscc.org.

Nhân viên tư vấn của chúng tôi đã được HUD chấp thuận có thể giúp bạn đánh giá các lựa chọn của bạn, tìm hiểu thêm về các chương trình của liên bang và tiểu bang có thể giúp bạn với các vấn đề thế chấp của bạn, và sẽ giúp bạn tạo ra một kế hoạch phía trước.Xin lưu ý: Tất cả các nội dung trên Blog ForeclosureHelpSCC được cung cấp thông tin duy nhất và không nên coi là hợp pháp hoặc tư vấn thuế. Nếu bạn có bất cứ câu hỏi , xin vui lòng liên hệ với chúng tôi qua đường dây nóng: (408) -293-6000, hoặc truy cập vào trang của chúng tôi: http://www.foreclosurehelpscc.org hoặc gửi email cho chúng tôi:help@foreclosurehelpscc.org.

FAIR HOUSING AND ANTI-DISCRIMINATION POLICY

It is the policy of ForeclosureHelp not to discriminate against any person because of that person’s race, color, religious creed, sex (gender), sexual orientation, marital status, national origin, ancestry, familial status (households with children under the age of 18), source of income, disability, medical condition or age. Color or “ethnic group identification” means the possession of the racial, cultural or linguistic characteristics common to a racial, cultural or ethnic group, or the country or ethnic group from which a person or his or her forebears originated. As required by law, we agree to take the affirmative steps needed to further fair housing.

ForeclosureHelp will consider any and all requests for reasonable accommodation in the application of its rules, policies, practices, and services, and in the use of its physical structures, in accordance with the requirements of state and federal laws. You can ask ForeclosureHelp to consider any reasonable accommodation you may have. Please consult with the Program Manager to request this accommodation.

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• Foreclosure Help’s Update on the Independent Foreclosure Review, Debt Collectors, Making Home Affordable, Hispanic Homeownership,and “Zombie Foreclosures” (foreclosurehelpscc.wordpress.com)
• Second Wave of Independent Foreclosure Review Checks Mailed Out on April 19, 2013 (foreclosurehelpscc.wordpress.com)