On Monday, the Federal Reserve and the Office of the
Comptroller of the Currency (OCC) were asked to schedule a
meeting to discuss the process of reviews of past home mortgage
foreclosure settlements. The request has been placed by 2
democrats - Senator Elizabeth Warren of Mass., member of the
banking committee and Representative Elijah Cummings of Md., the
top Democrat on the House Oversight Committee.
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In Jan 2013, OCC and other banking regulators announced a
foreclosure settlement deal with banks. The settlement, worth
about $9.3 billion, involved 13 banks over the issue of
deceptively seizing homes.
The foreclosure settlement deal will enable more than 3.8 billion
homeowners whose property was wrongly foreclosed in 2009-2010 by
the mortgage servicers to get cash compensation -- ranging from a
few hundred dollars to a maximum of $125,000.
Controversies pertaining to the foreclosure settlements cropped
up as at the end of reviews by the Fed and the OCC, the banks
expensed about $2 billion but to date consumers have not received
any aid. The banks which were under review include
biggies such as
Bank of America Corporation
JPMorgan Chase & Co.
Wells Fargo & Company
Therefore, these two lawmakers requested the Fed and the OCC for
detailed information in January related to the reviews on the
heels of the foreclosure settlement announcements. The request
was based on public demand for more details to trust the review
process conducted by the Fed and the OCC.
However, unsatisfied with the information from the Fed and the
OCC, these lawmakers have demanded further information to be
followed by a personal meeting in April on the status of their
These lawmakers want the public to gain transparency on the
matter so that these fraudulent activities are not safeguarded by
the regulators. The Fed and the OCC plan to provide additional
information related to the process of reviews and the costs
associated with them publicly.
Though the foreclosure settlements marginally dented the
fourth-quarter results of the banks, in the long run it is
expected to bring relief. Further, the distressed homeowners
would be benefited. We are hopeful that similar to the earlier
foreclosure deal, this would be a decisive step toward restoring
confidence in businesses and rejuvenating the crumbling housing
The stabilizing housing sector is likely to aid homeowners to
avoid foreclosures in the near term. Also, the rate at which
properties are entering the foreclosure procedure is expected to
trend down gradually, lifting the housing prices.