Talking about GAO: Bank Regulators Not Even Looking At Foreclosure Practices « SpeakEasy



GAO: Bank Regulators Not Even Looking At Foreclosure Practices « SpeakEasy

A rather nauseating statement from a Government Accountability Office report on foreclosures: Because they generally focus on the areas with greatest risk to the institutions they supervise, federal banking regulators had not generally examined servicers’ foreclosure practices, such as whether foreclosures are completed; however, given the ongoing mortgage crisis, they have recently placed greater emphasis on these areas. You read that right. Bank regulators in the United States were not even looking at foreclosure practices before the media latched onto the foreclosure fraud outbreak. The Office of the Comptroller of the Currency and the Federal Reserve acknowledged this in hearings two weeks ago, but it’s still harrowing to see the degree to which mortgage banking remains totally free of oversight, even after it drove the global economy off a cliff. The rest of the report is about banks abandoning properties instead of proceeding with a foreclosure sale. Kind of sick– throw a family out, then just abandon the house altogether, don’t even bother to sell it. The GAO says it’s not happening too much, but any sane businessperson would make sure that it never happens. A simple loan modification would cut everybody’s losses here, but the banks can’t be bothered with that. And nobody is bothering the banks about it.

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