OCC & FDIC Surrender Administration of Foreclosure-Fraud Settlement to Offenders

Recently leaked information indicating that a replacement to the Office of the Comptroller of the Currency’s (OCC) “Independent Foreclosure Review” has now been confirmed by the OCC and the Federal Deposit Insurance Corporation (FDIC). As the Huffington Post noted, there is clearly no longer a need for concern over the independence of the review, because it is now being managed by the very same entities who were supposed to be punished by the settlement. Lenders and servicers will now be making the decision regarding who will be compensated and how much they will receive in relation to alleged foreclosure abuses.

The FCC and the OCC have refused to be transparent regarding the details of this settlement, stating that more information will be released in the coming weeks. Considering two of the Obama Administration’s top campaign promises include transparency and helping abused homeowners, this point should not be quickly dismissed. If there were hope that this plan would truly help homeowners, one would think the President would insist on the transparency of these negotiations and details, as the effect of this settlement ought to be as significant, if not more significant, than the president’s efforts to implement universal healthcare.  If properly executed, this settlement could have the power to reverse the harms perpetrated by lenders throughout the housing bubble, and continuing into the post-bubble aftermath. However, the paths regulators seem to be taking would be more accurately called the path of least resistance.

Ernie Dobson, a homeowner who had previously applied for the OCC’s previous “Independent” Review and cited by Huffington post, summed up this latest news best: “I feel fear, fear that the person who committed the injustice is now going to be the judge and jury about that injustice.”