WASHINGTON, D.C. – In the wake of reports that banks and mortgage processors have continued forging signatures and submitting false affidavits, U.S. Sen. Sherrod Brown (D-OH) wrote to federal regulators urging them to better protect consumers by publicly releasing information related to their settlements with 14 mortgage servicers in order to prevent further illegal practices. Also known as robo-signing, this unlawful act has forced thousands of homeowners into foreclosure and raised doubts about the ownership of hundreds of thousands of mortgages. Brown is chairman of the Senate Banking Subcommittee on Financial Institutions and Consumer Protection.

"Wall Street and some in Washington want us to believe that robo-signing is a thing of the past. But the same risky practices that put our economy on the brink of collapse continue to infect the housing market. I applaud the county officials who have brought this to light.  It only underscores why Congress needs to support the work of the new federal consumer watchdog in Washington, and protect the interests of American households and communities."

Brown has led the fight against wrongful foreclosures and unfair practices by Wall Street. Specifically, he encouraged federal regulators to freeze foreclosures after the discovery last year that many servicers were wrongfully foreclosing on homeowners and not following existing foreclosure procedures and laws. Recently, both the Associated Press and Reuters reported that despite regulators’ assurances to the contrary, illegal robo-signing allegedly remains rampant in both foreclosure and non-foreclosure cases.  The reports also suggest that some regulators are aware of these violations.

Brown and nine other senators requested increased transparency of independent audits because consultants performing foreclosure reviews have conflicts of interest. They are chosen by the mortgage servicers to investigate and have other business relationships with those same mortgage servicers. The senators also requested the public release of Engagement Letters, Action Plans, Foreclosure Reviews, and other plans, policies, or processes submitted to regulators by mortgage servicers or third-party servicers to ensure that abuses in foreclosure practices are not being ignored by the review process.

Full text of the letter is below.

Mr. John Walsh                                                          
Acting Comptroller of the Currency                          
Office of the Comptroller of the Currency                                                                

250 E Street SW                                                        
Washington, DC 20219-0001                                    


The Honorable Ben S. Bernanke


Board of Governors of the Federal Reserve

System Independence Square

20th Street and Constitution Avenue NW

Washington, D.C. 20551


Mr. Martin Gruenberg

Acting Chairman

Federal Deposit Insurance Corporation

Washington, D.C. 20429 

Dear Acting Comptroller Walsh, Chairman Bernanke, and Acting Chairman Gruenberg:

We write today to urge you to make public critical information related to enforcement actions taken against mortgage servicers regarding their improper foreclosure practices.  This is especially important given this week’s allegations that mortgage servicers continue to engage in widespread “robo-signing” despite your assurances that these illegal actions would not continue.  Specifically, we request that you make public the following items related to the April 12, 2011 Consent Orders issued by your offices:


  • All “Engagement Letters” governing the  mortgage servicers’ contracts with the consultants hired by the servicer to review that servicer’s foreclosure actions;
  • All “Action Plans” that mortgage servicers and third-party servicer providers are required to provide to regulators and that will outline the financial resources, organizational changes, measurement systems, governance controls, and timelines that will be adopted to correct improper foreclosure practices;
  • All “Foreclosure Reviews” completed by consultants for each bank, which will outline the results of their investigations into whether ownership of promissory notes or mortgages were properly documented, whether foreclosures were undertaken in accordance with state and federal law, whether calculations under the Home Affordable Modification Program and proprietary loan modification programs were done correctly, whether borrowers were charged excessive or improper fees and penalties related to delinquency, and whether any errors identified caused financial injury to borrowers, among other items;
  • Any other plans, policies, or processes submitted to your offices by mortgage servicers or third-party servicer providers pursuant to the April 12, 2011 Consent Orders whose disclosure is important to instill public confidence in the process and results of the foreclosure reviews. 

We believe it is essential that the items listed above be made available to the general public or the public will lack confidence in both the foreclosure review process and results.  This is particularly the case because the foreclosure reviews are being performed by consultants who are chosen by the mortgage servicers themselves, and those consultants often have conflicts of interest in that they are not prohibited from getting future business from those same mortgage servicers.   The information we are requesting is therefore necessary for the public to determine the independence of the consultants being engaged to perform the foreclosure reviews, the accuracy of the foreclosure reviews, the adequacy of the “Action Plans” in responding to your findings, whether servicer performance meets the goals they have established, and whether those homeowners who experienced harm (such as being improperly foreclosed upon or denied mortgage modifications when they should have been granted under existing criteria) are given appropriate remedies.  Based on a legal analysis by the non-partisan Congressional Research Service, we also believe that it is well within your regulatory discretion under existing laws to disclose this information in the public interest.  This is consistent with your previous determination in April that release of the Interagency Review of Foreclosure Policies and Practices, which was essentially an examination report of foreclosure practices, was also in the public interest.  We understand concerns about not revealing mortgage servicers’ proprietary information, but also believe that some disclosure can be done on a bank by bank basis without compromising proprietary information.

 Furthermore, we believe that the full disclosure of these documents to the public is necessary given the recent reports by both the Associated Press and Reuters of the continued widespread practice of “robo-signing” among mortgage servicers.  Both have alleged that servicers continue to file thousands of property documents that appear to be fabricated.[1]  Reuters also quoted a top representative from the mortgage servicing industry saying that the Consent Orders have “not put a stop to questionable practices.”  David Stevens, president of the Mortgage Bankers Association, tellingly said that some loan servicers “continue to cut corners” and “the real question is whether the servicer complied with all legal requirements.”[2]

We respectfully request that all documents be made public and sent to Congress within one week of your office receiving them from mortgage servicers or third-party servicer providers.  If you have any questions about this request, please contact Amanda Fischer at (202) 225-2201 or Michael Passante at (202) 224-4744.  We appreciate your swift attention to this important matter.




Senators Menendez, Blumenthal, Franken, Akaka, Begich, Sanders, Cantwell, Tester, Rockefeller and Sherrod Brown