Congressman Cummings Returns To Scrutiny Of Independent Foreclosure Reviews

Federal Reserve Mortgage Servicing OCC

On April 24, House Oversight Committee Ranking Member Elijah Cummings (D-MD) expressed renewed interest in the termination of the Independent Foreclosure Review (IFR). In a letter to Oversight Committee Chairman Darrell Issa (R-CA), Congressman Cummings requested a hearing on “the widespread foreclosure abuse and illegal activities engaged in by mortgage servicing companies” and to “examine why the [Fed] and the [OCC] appear to have prematurely ended the Independent Foreclosure Review” through revised consent orders issued in January 2013. The request is based on “new evidence” obtained by Congressman Cummings, including claims that outside consultants retained as part of the IFR “had identified very high error rates in several categories of review” at certain institutions just before the revised consent orders were announced. In addition to these concerns, Congressman Cummings raised questions about how regulators arrived at the compensation amounts servicers were required to pay under the settlements, and how regulators determined that the allegedly harmed borrowers would benefit more from the settlement than if the IFR had been completed. Last year, Congressman Cummings, together with Senator Elizabeth Warren (D-MA), raised similar concerns about the regulators’ decision to cease the IFR by entering into revised consent orders.