Cummings requests hearing on mortgage settlement

This story appeared in Bank Digest.

In a letter to House Committee on Oversight and Government Reform Chairman Darrell Issa (R-Calif), Rep. Elijah E. Cummings (D-Md), the committee's ranking member, has requested a hearing to examine why federal regulators ended the Independent Foreclosure Review (IFR) and entered into a major settlement agreement with mortgage servicing companies. Cummings' request is based on new documents obtained by the committee showing that independent consultants brought in to review servicer abuses had identified high error rates in some categories directly before the IFR was terminated and the final settlement was announced.

Cummings wrote in his letter that it "remains unclear why the regulators terminated the IFR prematurely, how regulators determined the compensation amounts servicers were required to pay under the settlement, and how regulators could claim that borrowers who were harmed by these servicers would benefit more from the settlement--including the settlement amounts paid for each error category--than by allowing the IFR to be completed."