WASHINGTON Rep. Elijah Cummings, D-Md., is urging the House Committee on Oversight and Reform to investigate why regulators abruptly ended the independent foreclosure review and settled with banks last year.
The top Democrat on the panel penned a letter Thursday to Chairman Darrell Issa, R-Calif., asking that the committee hold a hearing on the issue, pointing to new documents that show consultants had been uncovering high error rates at some banks shortly before the review was halted and a deal was announced in January 2013. The review was conducted to address concerns that some borrowers lost their homes due to illegal or erroneous foreclosure practices.
"It remains unclear why the regulators terminated the IFR prematurely, how regulators determined the compensation amounts servicers were required to pay under the settlement, and how regulators could claim borrowers who were harmed by those servicers would benefit more from the settlement including the amounts paid for each error category than by allowing the IFR to be completed," the letter says.
Lawmakers have written numerous letters and held several hearings on the issue so far, grilling regulators and consultants for details about the review process and how the $9.3 billion settlement was reached.