The Big Banks accused of abusing homeowners will now help to decide who gets foreclosure aid dollars. What could possibly go wrong?
Washington is seeking help from an unlikely group in its effort to distribute billions of dollars to struggling homeowners in foreclosure: the same banks accused of abusing homeowners with shoddy foreclosure practices.
In doing so, the regulators are trying to speed the process after a flawed, independent foreclosure review delayed relief for millions of borrowers, according to people briefed on the matter. But housing advocates worry that the banks, eager to end the costly process, could take shortcuts as they comb through loan files for potential errors, in some cases diverting aid from the neediest homeowners.
Regulators say they will check the work. And banks have already agreed to pay a fixed amount to troubled homeowners, creating another backstop.
According to officials involved in the process, who spoke anonymously because the matter is not public, the regulators had few alternatives.
These are the same regulators who just a month ago didn't trust the banks.
Here's how this is supposed to work, the Big Banks will now have to assess each loan for potential errors -- errors they never admitted to in the slap-on-the-wrist settlements with the Justice Department -- which will then help the Big Banks determine how much money each homeowner will receive.
Wow. How about just sending bankers door-to-door and have them slap the 4 million homeowners who lost their homes to foreclosure in the face?