States Asked for Foreclosure Probe—3 Years Ago
Federal regulators turned down request, put off matter
By Matt Cantor, Newser User
Posted Nov 8, 2010 1:26 PM CST
Then-Comptroller of the Currency John Dugan, left, and former Comptroller of the Currency John Hawke Jr., testify on Capitol Hill in Washington, Thursday, April 8, 2010.   (AP Photo/J. Scott Applewhite)

(Newser) – State regulators suspected that there was something fishy about banks' foreclosure procedures as far back as three years ago, but federal regulators forbid them to take action, the Washington Post reports. The federal comptroller told the states his office was already planning an investigation, and that banks should only respond to federal inquiries. But instead of following through, the office trusted the banks’ self-assessments.

“Based on what we were seeing and what we were concerned about, it felt like a chronic underreaction at the federal level,” said a state banking official. When the mortgage industry identified problems with thousands of foreclosures in September, the Office of the Comptroller of the Currency still refrained from investigating. Only two weeks ago did the OCC—the top overseer of the biggest banks—take action by sending its own workers into banks to review foreclosure practices.

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Showing 3 of 9 comments
Barbara Ann Jackson
Nov 18, 2010 2:53 PM CST
Questionable mortgage activity and fraudulent foreclosure is IMPOSSIBLE without an Officer-of-the-Court (a lawyer) filing civil, as well as bankruptcy judicial pleadings! And the current Congressional hearings on Hearing on Mortgage Services and Foreclosure Practices should include a THOROUGH probe of the LETHAL role of lawyers regarding mortgage and real estate repossessions! Otherwise, investigative hearings exclusive of the very lawyers who file court pleadings has appearances of a dog and pony show. Lawyers are required to prosecute legal claims by means of law, rather than predilections! Even if / when mortgage lenders instruct lawyers to file inappropriate or unlawful documents, a LAWYER is obligated to advise what can and cannot be lawfully done! For a very LONG time people such as Professor Elizabeth Warren, Professor Katherine Porter, and Gretchen Morgenson-NY Times (and even me!) have sounded alarms about PREDATORY, sometimes irreparable outcomes from UNREGULATED, IGNORED debt collection ILLEGALITIES. Our nation’s mortgage crisis has finally caused serious pondering of factors that indicate a mammoth creature (I'm certain it is the judicial elephant!) might be the driving force for this incredible Banking debacle! For myself, and people who ask me to help, I HOPE a graphic TRUE STORY, spelling out methods that judicial systems are utilized to accomplish fraudulent real estate conveyances, and unlawful collections, is a catalyst for needed CHANGE. The epitomizing foreclosure story is found here: Foreclosure Fraud Assault - A Cry For Help http://newsblaze.com/story/20101116120222nnnn.nb/topstory.html “A foreclosure that entails savagery, fraud, corruption, greed, intrusion, peril, trauma, desolation, shocking deviation from established law and court rules and procedures, and reprisals for whistleblowing and for not relinquishing one's home to sham foreclosure is a riveting story worth being told. The victim's painful story comes with a plea for humanity to rise to a duty of raising awareness, and not merely for the sake of aiding this one victim. It is for the sake of calling attention - and hopefully "making a difference" by requiring lawmakers to make changes in what appears to be third-world judicial systems of shocking perversion and inequality, harmful to the entire economy. . ."
speakerfixer
Nov 8, 2010 4:56 PM CST
And people like Barney Frank were insisting "There is no problem" as recently as 2004. And did NOTHING to fix this problem, when in 2006, he was put in charge of committees that could have helped. Wonder why? At least people like John McCain were WARNING about the problem, by 2005-2006... but, they were ignored, by those who thought they knew everything, and that nothing BAD could EVER happen (could it?)...
my-name-here
Nov 8, 2010 3:05 PM CST
If these big businesses and banks could be responsible and ethical, there would be no need for regulation, but so far, they prove time and again that they will not/can not be. Hence, the need for regulation. Yes, it's a case of the corrupt watching the corrupt, but what choice is there?