From now forward, all servicers under the supervision of the Office of the Comptroller of the Currency (OCC) must conduct self-assessments to examine foreclosure management practices no later than September of this year[1]. Upon completion of the assessment, the lenders must identify and “take immediate corrective action” to address weaknesses in the process. The OCC has issued this mandate in response to what regulators have called a “pattern of misconduct and negligence related to deficit practices in residential mortgage loan servicing and foreclosure processing” in 14 large mortgage servicers.
While this sounds like a good thing, it is actually frustrating many state attorneys general, who have been frustrated by the OCC since it reached its own robo-signer settlement with major lenders earlier in the year. In fact, the AGs have written a letter complaining that the federal agency is actually ignoring a “congressional mandate” that gives states the right to regulate their banks rather than the OCC[2]. The letter also accuses the office of “preventing states from enforcing consumer protection laws on national banks” during the 2007-2009 financial crisis.
Do you think that the OCC is helping or hurting by issuing these mandates? Should the federal agency “back off” or keep trying to regulate its errant lender members?
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[1] http://www.dsnews.com/articles/occ-mandates-foreclosure-procedure-assessments-for-all-national-banks-2011-06-30
[2] http://www.reuters.com/article/2011/06/28/us-financial-regulation-occ-idUSTRE75R6WA20110628
The OCC does not need any more Regulations. It hardly ever enforces those they do have pursuant to its mandate. My experience with the OCC in relation to abused borrowers is: 1) the complaint is submitted to the OCC; 2)weeks later an OCC letter is received that identifies a “case number” for the complaint, 3)follow up calls from 3 days to 7 or 10 days later yield scripted replies that a copy of the complaint has been sent to the servicer who has 30 days to reply, to be followed by on the next call after the expiration of the 30 day period when the caller is told, no, the response time is not 30 days it is 30 BUSINESS days, but I will email a manager to see what the status of this matter is, call back in a few days. 4) 4 days later contacted with a status query, the OCC scripted response is “there is no change in the status–no word from the servicer etc, etc. This is a continuing pattern of unfettered abuse, deception, and total disregard of the individual taxpayers’ funding as well as the borrowers’ rights, that keeps the OCC running on its dysfunctional path.
For the record, only the most egregious servicer misconduct is reported by borrowers with whom we are dealing. Results from late 2007 to date where the OCC has taken any known form of remedial or other action directed to a servicer (national bank etc.) on a complaint submitted by one of our borrowers = ZERO! This is neither surprising nor beyond the status quo. Rather. it continues to be business as usual for the OCC in this context. An exact match of the DNA for the Lack of Accountability Gene that permeates the entire industry. That includes the FHFA-OIG that owes “someone” a fiduciary duty in carrying out the Conservatorship of the GSEs, Freddie Mac and Fannie Mae. I have received emailed correspondence as a pdf attachment from the OIG that references no case number, no file number, with a fax number on the letterhead that did not work, signed by the assistant OIG Director with “facts” based on a telephone conversation–the OIG would not accept a faxed or emailed complaint–the one complaint at issue, the letter I received back referred to me as the borrower, not the person who was named in the interview by telephone, as the complainant, with the loan number as well as the Freddie Mac Asset no. Without getting fact specific, this matter centers over a foreclosure of a residential property during an open and active loan modification with 2 letters from the servicer requesting updated information in the same month stating expressly that no foreclosure would occur within 30 days from the date of the letter(s)–they foreclosed anyway in that 30 day window-the borrower did not even know the sale date had been set– the servicer and Freddie Mac agreed to rescind–still no rescission, no loan modification–9 months later–so no, I do not for a minute think that more regulations will do anything–what these folks need to do is to take prompt responsible action that is consistent with the pre-existing mandated authority they have had for quite some time–accountability is not rocket science–it seems that those responsible for the ongoing wide-spread disaster this country is in the midst of are virtually immune from being held accountable by those whose irresponsibility in abandoning and abusing official duties of their Office, have been allowed to let this misconduct occur at all.
It’s clear the OCC has the power to ruin local banks if you read the information on its website. A centralized global agency with the power to make policies and decisions–whether indirectly or directly–for all local banking systems on a large scale is ultimately a disaster.
Every locale and state has its unique economic issues. No citizen should presume that a giant central agency handing down sweeeping regulations at will can possibly maintain the interests of local banking commerce.
Further, the OCC is funded and incentivized by national banks. How can this not be a conflict to the survival and thriving of local banking? The unbridled policies and politics of the OCC are positioned to sabotage local banking–and in turn small business and our freedom. That’s how I see it.
ginaann says:
July 4, 2011 at 4:08 pm
It’s clear the OCC has the power to ruin local banks if you read the information on its website. A centralized global agency with the power to make policies and decisions–whether indirectly or directly–for all local banking systems on a large scale is ultimately a disaster.
Every locale and state has its unique economic issues. No citizen should presume that a giant central agency handing down sweeeping regulations at will can possibly maintain the interests of local banking commerce.
Further, the OCC is funded and incentivized by national banks. How can this not be a conflict to the survival and thriving of local banking? The unbridled policies and politics of the OCC are positioned to sabotage local banking–and in turn small business and our freedom. That’s how I see it.