As a result of many reader requests, we’ve turned our series based on testimony from whistleblowers at Bank of America and PNC on the whitewash more formally known as the Independent Foreclosure Reviews into an ebook, which we are releasing today. This was the very same OCC mandated process, billed as a way to provide wronged mortgage borrowers with the opportunity to get a measure of justice, that instead turned into a costly and embarrassing fiasco. But it still worked out well for the banks. The amount they paid, even with a mind-boggling $2 billion of fees to consultants and another $3.6 billion in cash payments to borrowers, is far less than they would have shelled out if the process had been designed to conduct the investigations fairly and give meaningful awards.
We hope you will download this ebook, read it, and circulate it widely. It’s timely because the botched foreclosure reviews are coming back into focus. The GAO released its report on them yesterday, and even though it was narrow in focus, it confirmed, as Dave Dayen reported, that the IFR was poorly designed, inconsistently implemented, and subjected to changing guidelines. Elizabeth Warren and Elijah Cummings will be meeting with the OCC and the Fed on Tuesday April 9 to grill them on their sorry performance in the IFR. On Thursday the 11th, Sherrod Brown will be holding hearings in the financial institutions and consumer protection subcommittee. Maxine Waters has also said she will be introducing legislation next week to curb regulators’ use of third party consultants.
We are distributing copies to Elizabeth Warren and Elijah Cummings and to Sherrod Brown and the members of his subcommittee.
Naked Capitalism has already has an impact on this process. Early on, a post by Michael Olenick on the blatant conflicts of interests of one foreclosure review contractor, Allonhill, resulted in its role being cut back considerably. The reviews themselves are widely recognized to be a failure. Even the OCC is not trying to defend them. Our whistleblower series helped confirm that suspicions about the shortcomings of the process were well founded.
We are making this ebook available for free to make sure it is distributed as widely as possible. Please share it with friends, particularly anyone you know who sent in an IFR letter. Please also sent it to your Congressmen and relevant state representatives and agency heads. The IFR was an ineptly executed sop to the banks. It’s important to let people in a position of authority know that the public understands what happened and is not happy about it. The more citizens express their outrage and send in supporting evidence like our ebook, the more they recognize that siding with banks isn’t necessarily a winning proposition.
I hope readers will campaign to have hearings on the House. Maxine Waters, who is the ranking member of the House Financial Services Committee, has asked for them, and public pressure would overcome Republican inertia. The most important targets are Jeb Hensarling, Scott Garrett (Capital Markets/GSEs Subcommittee Chair) and Randy Neugebauer (Housing Subcommittee Chair).
In additional to calling or e-mailing these key players, call your Congressmen. Ask to speak to the staffer who handles housing and foreclosures. When you get them, ask if they have heard about the Independent Foreclosure Reviews and the settlement. I guarantee a surprising number won’t know the difference between it and the National Mortgage Settlement (the big Federal/state attorney general settlement of early 2012). Then tell them about our whistleblower accounts, and that they need at least to read Chapters 1 and 2. Tell us how it went in the comments section.
Finally, since the GAO report is just out, it would also be productive to call your local media outlets. Congressmembers watch local news coverage closely. There’s no question that people in their viewing area were shortchanged by the IFR and they could use our ebook to get up to speed on the underlying issues.
We hope you’ll enjoy the ebook. We also hope you’ll continue to support us in producing hard-hitting, substantive original research that causes serious problems for the banks. Even with the underlying post series completed, it took a good bit of additional work (revising for a book format, copyediting, a considerable amount of production) to get this work into final form (and big applause to Lambert, Kim K, Jessica, and our faithful transcriptionist).
But getting the truth isn’t costless. Even something as simple as turning our post series into an ebook took meaningful time and effort of several people. We hope you’ll contribute to our site (the PayPal and WePay buttons are in the right column) so that we can continue to do hard-hitting investigations and analysis that causes serious problems for banks. Remember, the veneer of legitimacy is vital to them; the more we show how false that is, the more we help embolden people who want to move away from them but are afraid to stick their necks out. As Matt Stoller wrote:
The truth is, you can get lies for free. Wall Street is only too happy to buy advertising, to make sure you hear from their well-credentialled experts. If you are not paying for your media, though, then they are. And you aren’t the customer, you are the product being sold. While this arrangement works, what it means is that you’ll get lies for free. And this is a very expensive proposition.
If you are tired of the lies you are being fed for free, put your valuable resources into reshaping how information in our society flows. Cash is easiest way to help, but we can use some types of in-kind support, for those of you for whom that might be easier, like sound editing (yes, if we ever get our decks cleared, we will be doing podcasts), WordPress assistance (and if by happenstance, any of you have inside connections at Quantrix, we would LOVE a copy for financial modeling).
Please download, read, and share!
PS The download is MUCH MUCH better looking than ScribD make it appear. It also makes the native font size look smaller than it really is. This rendering does not do it justice. So download away to get a proper viewing experience and enjoy! Please use the download button at the bottom left of the frame.