At first glance, it looks like Florida foreclosure victims are finally getting the help they need from the feds. Reading the fine print it looks like if we had to describe this in one tweet word: #fail. The same banksters that sunk the economic ship into the mortgage crisis are now the decision makers for homeowners looking for foreclosure mercy. Sounds to us like homeowners are being asked to sleep with the enemy.
As part of a consent order with federal bank regulators, the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS) (independent bureaus of the U.S. Department of the Treasury), or the Board of Governors of the Federal Reserve System, fourteen mortgage servicers and their affiliates are identifying customers who were part of a foreclosure action on their primary residence during the period of January 1, 2009 to December 31, 2010.
The Independent Foreclosure Review is providing homeowners the opportunity to request an independent review of their foreclosure process. If the review finds that financial injury occurred as a result of errors, misrepresentations or other deficiencies in the servicer’s foreclosure process, the customer may receive compensation or other remedy.
Oppenheim Law Says Faulty Failure? The Independent Foreclosure Plan
Unfortunately, the government has again come up with yet another faulty plan to try and help homeowners by creating the Independent Foreclosure Review. It’s objective is to compensate homeowners who sustained financial injury because of the banks unethical and even illegal banking practices.
The two agencies (the Office of the Comptroller of the Currency and the Federal Reserve) that are in charge of overseeing this program have gone out of their way to keep the details of this program secret. If the program is not transparent and above-board, how can homeowners be sure their interests are being preserved??
Blurry details for Florida Homeowners
However, if we look into the released details of the program, there are major problems that will make the government’s effort to provide relief to homeowners practically nonexistent. For one, even for the agencies running this effort, the type of compensation is still unclear. Homeowners will not know if they should expect to receive monetary compensation for their financial injury or just non-monetary compensations such as repairing their credit scores.
What also remains unclear is how the compensation will be calculated. The bank practices and bank errors that the consultants will address have also been kept under wraps. Without such information, how are the borrowers and attorneys suppose to decide whether entering into this program right for them?
The most alarming issue is the possible conflict of interest between the consulting firms that were chosen by bank regulators to administer the foreclosure reviews. The fact is these consulting firms are actually getting paid by the banks. And while bank regulators claim they will make sure the consulting firms act independently of the banks, how is this any different than the questionable practices of the auditing firms that are hired by the very companies they are suppose to audit or as Florida Real Estate Attorney Roy Oppenheim has pointed out in his soon to be published law review article, Deconstructing the Black Magic of Securitized Trusts , the credit rating agencies like Moody’s Bond Rating Service, who had “their vested interest in giving securities an inflated credit rating, considering that were paid by large lenders to rate these securities.”
No Experience Required
There are also concerns that the personnel hired to conduct the reviews are not sufficiently competent to identify whether a bank engaged in illegal conduct. The consulting firms are demanding very little experience in foreclosure or mortgage-servicing, however, in doing so; they will be hiring personnel that are no different than the bank employees who engaged in robo-signing.
Even with the few details about the program, it is easy to see that it is likely to fail. The same banks that ultimately led the economy into the mortgage crisis are now in control of deciding which homeowners are entitled to compensation for the banks own wrongdoings. It is doubtful homeowners will receive any meaningful relief from this program.
Thus, at the end of the day, and as always, Florida homeowners looking for relief will continue to have to rely on themselves to construct their own personal bailout plan. If you need assistance please feel free to contact Oppenheim Law for guidance.