A few quick headlines from the Senate Banking Committee on that hot mess known as the "Independent Foreclosure Review."
Starring Sherrod Brown, Jeff Reed and Elizabeth Warren.
She does indeed, save the best for last. (2:27 Time.)
To General Counsels of the Federal Reserve and OCC in the first set, then reps of the consultants in the second.
And will someone in the White House read this...
Sherrod Brown, on Chris Hayes' MSNBC show "All In" this evening, seemed to suggest Promontory and the revolving door will be receiving a bit more scrutiny next time.
Sherrod Brown to Daniel Stipano (OCC) - The OCC has a name of a firm whose track record isn't good, but the OCC will not release that name?
Stipano - Yes. It's a legal issue for the OCC to do so.
Brown asked Stipano about the revolving door issue of 'indepencence' - how separate were the banks or consultants from the government in terms of past and present employment to financial institutions. Stipano replied - “it’s not realistic to expect no prior ties to the institution. “
Brown - Did anybody at OCC have concerns about how cost of IFR were growing?
Stipano - "We were all trying to make it work." (Didn't answer the question IMHO)
Elizabeth Warren - If you believed the banks had illegally foreclosed in more cases, would you have settled for more money, correct?
Richard Ashton (Fed) - There were other factors behind the decision.
Warren - It matters how many homeowners were victims of banks in determining settlement amount, was it not? Getting the right amount of cash to the right people. Is that right?
Ashton - We gave up looking for individual injury.
Warren - We discovered (a previous percentage) was a made up number. If you can't correctly tell how many people were the victims of illegal bank actions, how can you decide what is appropriate for settlement?
Ashton - It was not a perfect agreement.
Warren - Mr Ashton, I understand delay. But it doesn't mean you pick a number out of the air. It should have been based on illegal activity and number of injured homeowners.
Ashton - It would have meant additional delay.
Warren - I want to know on a bank by bank basis number of illegal foreclosed families. Will OCC give me that information?
Stipano - (basically, avoids just saying 'no.')
Warren - Unless someone throws a rock through a window you won't release it?
Stipano - No.
Warren - If an illegally foreclosed family wants to sue a bank, would it be helpful for the family to have information in your files about how the bank illegally foreclosed upon them?
Ashton - Yes.
Warren - Do you plan to give those families the information in your possession about how the banks illegally foreclosed against them?
Ashton - (basically not a 'yes.')
Warren - So you've made decision to protect the banks, but not the families that have been foreclosed against?
Ashton - Yes.
Warren - You let the banks violate the law and you don't know what you'll be telling the homeowners? WIthout transparency, we can't have any confidence in your oversight or that the markets are functioning properly at all.
THE ERROR RATE ISSUE
Warren - Does what you found tell us in how many cases problems were found.
Alt (Promontory) - We were not in a position to determine that by the time Fed and OCC cancelled IFR.
Warren - What did OCC and Fed require of you to figure out the error rate?
Alt - We created a process, presented it to OCC. It was not their requirement.
Warren - What was your rate of double coding? (A way of testing a sample for errors.)
Alt - Couldn't say
Warren - What was your error rate?
Alt - I could not do that off the top of my head.
Warren - Was the error rate coming down over time?
Alt - I believe it was.
Flanagan (Price Waterhouse Coopers) - We can't disclose error rate by contract, same as Ryan.
Ryan (Deloitte & Touche) - The error rate reported in the media is mischaracterized.
Warren - I have no further questions at this time. We don't have the information we need to conclude the basis for this settlement.
She was just starting to get at the recently released payout sheet when the Senate Video Feed cut off (only planned to be live until noon.)
And yes, in panel one, it was acknowledged that there is also a revolving door.
Thanks for the recs! Captured audio, will clean up after the SBC Video is posted probably Friday.
HOW DID IT END?
So after the SBC uploaded the whole event, what you'll get is a payoff where you can watch her eviscerate three very uncomfortable looking gentlemen.
2:27:10 The document of Foreclosure Review Payouts. This is what the process was about - determining level of harm and whether, then how much, financial compensation should take place.
Warren - Having resolved this 4 million families issue, who put the people into these boxes on the payout document?
Auditors - We don't know.
Warren - You ran the independent reviews, That's what you got paid to do. And yet, we can only presume, it appears the banks put these people in these boxes. You (the auditors) were not asked to do this. That leaves us with the banks that broke the law putting these people in these boxes. The auditors didn't do it. The OCC and FED didn't do it. The banks made up the payout sheet. There is no independent analysis of how the banks broke the law.
Ryan, Alt, Flanagan - The OCC and Fed reviewed their data, but their firms were not involved in the preparation of that payout document.
Warren - You were not asked to make an independent review of this? I just wanted to make sure. It now appears, the people who broke the law are the same people who determined who will be compensated from the breaking of that law. "Mr. Chairman, I don't have any other questions."
Now that, Kossacks, is an American Senator standing up for us.