Federal Officials Ignore State Warnings of Foreclosure Flaws

The federal Office of the Comptroller of Currency ignored warnings from state banking officials about wrongful foreclosure conduct for the last three years according to a report in The Washington Post today.   

The Post reports that as the foreclosure crisis began to mount three years ago a group of state banking regulators began to suspect that some homeowners were wrongfully losing their homes. So, the group asked some of the biggest national banks about their foreclosure operations. In response, two banks - JP Morgan Chase and Wells Fargo refused to co-operate and the state officials turned to the OCC for help.

The OCC, which oversees the nation's largest national banks, refused the states' requests saying that the financial giants should answer federal inquiries only, not state inquiries.  The OCC's comptroller at the time, John Duggan, wrote that his agency was already planning to collect foreclosure data and that the states' involvement would only confuse matters.

Yet, instead of conducting its own investigation, the OCC decided to rely on the banks' in-house assessments of their foreclosure processes. To us that sounds like the farmer relying on the fox to assure him that he's staying out of the hen house.

This classic failure to oversee such a critical area of consumer's lives (i.e., their homeownership) has led to ongoing failures by banks and their contractors to strictly adhere to foreclosure laws. Our firm particularly sees this trend in wrongful pre-foreclosure home seizures, lock outs and trash outs, where banks seize a home without any prior notice before a scheduled foreclosure auction date and before a homeowner has even abandoned their home.   

If you've been the victim of a wrongful foreclosure home seizure, lock out or trash out, you may have important legal rights and remedies. Get your FREE report now and schedule a no-obligation case assessment with one of our lawyers.