Plans to Introduce Legislation to Address the Use of Consultants
Congresswoman Maxine Waters, Ranking Member of the House Financial Services Committee, released the following statement today in response to a GAO report on the Independent Foreclosure Review. The study was conducted as the result of a request by Congresswoman Waters, Senator Robert Menendez, Congressman Brad Miller, and Congressman Luis Gutierrez, which was made to the GAO in January 2012. The report, titled Foreclosure Review: Lessons Learned Could Enhance Continuing Reviews and Activities Under Amended Consent Orders, was officially released by the GAO today.
Statement by Congresswoman Waters
The report confirms that the Independent Foreclosure Review process was poorly designed and executed. The GAO demonstrates that the projected error rates which were used to negotiate a settlement had little bearing in fact. The OCC should therefore retract the servicer error rates they previously submitted to Congress and the press. Moreover, the report confirms what I had long suspected – that the OCC’s oversight of the supposedly-independent consultants hired by the servicers was severely deficient. The report should serve as a wake-up call.
In the months since I called for the GAO report, it has become more and more apparent that the Independent Foreclosure Review was deeply flawed. I have written follow-up letters to both the OCC and the Federal Reserve calling for swift action. I also have requested a hearing on the issue.
Next week, I will introduce legislation to address the problem of relying on outside contractors for enforcement actions. Using outside contractors paid by the servicers themselves did not add to the “independence” of the Independent Foreclosure Review. My bill will set standards for the use of such consultants so their incentives are clearly aligned with those of the public.
Letter to the GAO requesting a report on the Independent Foreclosure Review – 1/13/12
Waters’ statement on the settlement which effectively ended the IFR – 1/7/13
Waters’ letter to the Federal Reserve and the OCC raising questions about the settlement with mortgage servicers – 1/31/13
Press release -- Waters requests hearing on the IFR process – 2/5/13
Waters’ letter to the Federal Reserve and OCC requesting additional information about the Independent Foreclosure Review – 2/15/13