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Insiders reveal deep flaws with foreclosure review project

Last week Salon reported that 10 major banks, including Bank of America, Wells Fargo and JPMorgan Chase, agreed to pay a settlement of $3.3 billion in cash to 3.8 million mortgage borrowers who were foreclosed upon in 2009 or 2010. The settlement came after the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board closed down a vast project of independent reviews aimed to correctly determine how homeowners were burned and how much compensation they should receive.

The independent auditing project was deemed too costly, so instead -- to the dismay of a number of commentators and homeowner advocates -- the mortgage companies themselves will determine distribution of the $3.3 billion settlement sum. “It is just incomprehensible to me that they could not find a third party that has the wherewithal and independence to fairly determine what the damage is to homeowners,” John Taylor, president of the National Community Reinvestment Coalition, said when the settlement was announced.

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