Bank of America’s announcement this week that it would resume foreclosures in 23 states doesn’t mean the crisis is ebbing—or that banks are off the hook. Consumers Union, publisher of Consumer Reports, maintains that all foreclosures should stop until lenders can prove they’ve adhered to all laws, regulations, contract guidelines and stated internal policies with regard to foreclosures, loan modifications, and other forms of foreclosure avoidance. Recently, CU posted its position on its advocacy Web site, Defend Your Dollars, on what banks should do now to prove their compliance: • Obtain an independent audit evaluating and describing the current level of compliance, as well as identifying any deficiencies in the past 36 months.
• Make public the results of the audit. • Correct any deficiencies identified in the audit and undergo a re-audit after six months until an audit shows that all deficiencies in compliance have been fully corrected.
• When there has been a clean audit determining that there are no (remaining) deficiencies in compliance, present the clean audit to the primary regulator, undergo a thorough regulatory examination for compliance, and obtain the permission of the regulator to resume foreclosures based on an independent determination of the regulator of full compliance with all such laws, requirements, and policies.
• Negotiate with the primary regulator and with law enforcement a plan to remedy the harm from past noncompliance. Include in those talks state attorneys general, with input from groups representing affected borrowers and affected communities. For more on a consumer-centered approach toward the foreclosure mess and other personal-finance issues, check out The Daily Dollar, Defend Your Dollars’ regular blog.
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