This story on the Office of the Comptroller of the Currency’s inquiry into possible mortgage servicer improprieties was released last night by the Washington Post; oddly Bloomberg had not picked it up when I trolled it, apologies for not catching it sooner. Note that this development supports our contention that servicing problems are widespread. Note that the story indicates that regulatory scrutiny has moved beyond the issue of improper affidavits to document fabrication. From the article (hat tip reader Jim C):
John Walsh, acting director of the Office of the Comptroller of the Currency, told lawmakers during a hearing on the financial regulatory overhaul enacted this summer that some lenders “clearly had deficiencies” in their system for foreclosures.
The banks contacted by regulators include J.P. Morgan Chase, which announced Wednesday that it was freezing 56,000 foreclosures after finding errors in its preparation of documents, according to OCC spokesman Kevin Mukri. Other lenders contacted include Bank of America, Citibank, HSBC, PNC Bank, U.S. Bank and Wells Fargo.
“We both want to see that they fix the processing problems but also to look to see whether there is specific harm [that has been caused] in individual cases,” Walsh said….
The paperwork problems range from potentially forged documents to bank employees who never read borrowers’ files before signing off on an eviction….
Mukri would not comment about other banks but said that the OCC has teams permanently stationed at each one and that those teams have been in close contact with senior management at the banks to ensure the reviews are completed in a timely manner.
The fact that the OCC has on site staff putting pressure on top executives suggests that this is being treated as a high priority item.