All In   |  April 11, 2013

Homeowners getting it from all sides

Homeowners wrongly foreclosed upon first got a small, lousy settlement and can't even get answers from the government agency that’s supposed to be looking out for them.  Sen. Sherrod Brown joins Chris Hayes to talk about what can be done.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> you're saying you find evidence of illegal activities --

>> yes.

>> by the banks when they have illegally foreclosed against homeowners, that that information is privileged and you will not release it without a letter from congress?

>> if it is de-75ed from the bank examination process, yes, it is --

>> how else would you get it?

>> that was senator elizabeth warren today at a senate banking subcommittee hearing that flew so far under the radar, it's a miracle it didn't crash.

>> the senator was doing what she does best sticking it to those in the world of finance that should be held so some kind of account. an incredible settlement between the office of the occ and banks . a settlement over what are astoundingly widespread practices of deceit, malfeasance and incompetence of banks in wrongfully foreclosing on homeowners. today focused on part of that. and the history goes like this. it's amazing. a few keys, it became completely clear the foreclosure process in this country was a complete disaster. it began to look very embarrassing for a certain entity, the occ, that was charged with regulating the very same banks that were so obviously screwing it all up. the basic stance for the occ was, don't worry, we got this. they began what was called the independent foreclosure review, they said would be a way of investigating all this wrongdoing in the papers and embarrassing everyone and making sure they got to the bottom of the whole thing and everyone was made whole. the independent foreclosure review was essentially having banks hire independent consultants on bank payrolls to look at the bank's own records. no, really, that's the way it worked or the way it was supposed to work. the process proved to be so obviously disfunctional midway everyone threw in the towel and thus the recently announced settlement. the whole episode was such a ridiculous disaster, the only winners out of this weren't the foreclosed homeowners, constituents who walked away with $2 billion in feeses. $2 billion. the settlement for 4 million homeowners were $3.6 billion to the nearly 4 million wronged homeowners and $2 billion in fees to seven independent consultanting firms. here's the subcommittee senator brown asking if those fees paid to the consultants took away from money victims ultimately got in settlements.

>> if you're the bank and you realized you spent $90 million on paying consultant x, don't you think that affected their negotiations on how large a settlement it would ultimately be?

>> i can't speak for the banks .

>> how do you know it didn't is the better question.

>> i don't know it didn't.

>> you don't need to get inside their head to know the answer to that. the best part, everything revealed at the hearing today, everything the independent consultants they found out the banks were doing wrong, members of congress can't see. even though it's a federal regulator, the occ is not turning it over, called it confidential supervisory information. joining me tonight is the man you just saw, senator sherrod brown , democrat from ohio. my first question to you is this. i watched the hearing today and there's a lot going on on capitol hill all over the place. you had to leave for the gun vote at some point. why did you want to have a hearing on this? why are you focusing on this issue? why should it matter to you and voters?

>> the occ has not a very good history of looking out for consumers. a pretty good history looking out for banks . they have a new controller of the currency, controller curry more pro consumer than his predecessors. he's been there about a year and we're starting to see improvements. i think you can see in this hearing when jack reed asked questions and elizabeth warren asked questions and i asked questions, you can see they don't think of families, they don't really imagine, i don't think these regulators think what it's like for a parent to tell your daughter 12 years old we have to move and i don't know what school district you're going to have to move in because we're foreclosed on our home. that doesn't come up and is important. make that connection these are families and human beings and so damaged and hurt in so many communities by these illegal foreclosures.

>> it also seemed to me watching the hearing, the in cess tremendous relationship between banks and companies they're hiring to look at their books as guided by the regulator. it looked like the worst nightmare you have about all the self-dealing that happens between wall street and regulators watching this hearing and watching you and your colleagues ask them questions. here's jack reed talking about hiring these independent consultant consultants themselves are on the bank payroll.

>> would you delegate that responsibly, effectively to consultants who did not have a relationship with you, had a contractual relationship with the bank.

>> yep.

>> why?

>> well, we thought it was the best alternative. there was clearly-

>> do you still think it's the best alternative?

>> no. i think if we had it to do over again, we would take a different approach.

>> my question is, is there going to be aulktability for this at the end of the day . that is the question all of us ask when we watch the latest iteration of whatever the foreclosure fraud process is dumping on us.

>> i think the answer to that is we've seen some progress of the hearings. actually, they gave us more information than we expected about fees and other things. not nearly enough. we still don't know enough about individual or en masse information about homeowners, about people who lost their homes. i mean just this peculiar kind of -- the regulator hires -- the regulators tells the banks to hire these companies, these consultants so this information is between two private companies even though the regulators say to do that. we don't have, as congress or the public, we don't have access to this information as much as we should. that's what's got to change. the qualifications and conditions of hiring and the contracts, none of that is public yet. that's one of -- that's a mission jack reed and i talked about afterwards, we have to get this stuff to be public, even though it's between two private companies with their overseer.

>> sitting on a hard drive somewhere, there are audits conducted of individual loans of wrong f wrongful cases of foreclosure and you're being told as a member of the united states congress you cannot see that.

>> it's not government money even though it was money probably taken from the settlement for the individual homeowner. even though what we didn't get to into probably as much as we could is the revolving door . one of these culting gro iconsulting group s is the receptacle of the regulators. you have the regulators writing complex rules, going to a private company and only these regulators now at the private company can interpreter these complex rules. they all want to intimidate us and want us to think we can't really understand it. only they can understand it. nobody wants to look stupid. as a result, they've gotten away with far too much, this revolving door .

>> senator brown, we will continue to follow this revolving story. thanks. we'll be back with