Allonhill LLC, a consultant hired for a regulator-required review of whether borrowers were cheated by U.S. mortgage servicers, was fired from the job today by the Office of the Comptroller of the Currency, saying the firm had a conflict of interest.
Denver-based Allonhill was working for Aurora Bank FSB, based in Wilmington, Delaware, and as a subcontractor working with Promontory Financial Group LLC for Wells Fargo & Co. (WFC:US), after a settlement required the mortgage servicers to have their foreclosures reviewed, the OCC said in a statement today. Allonhill self-reported that it had made prior reviews “of loans that are part of the same pool of loans” in the current review, the OCC said.
The regulator of U.S. national banks and other federal agencies settled with 14 of the largest mortgage servicers a year ago, requiring the servicers clean up their foreclosure practices and hire independent consultants to see whether their foreclosure methods in 2009 and 2010 unfairly hurt specific customers and how those people should be repaid.
A statement from Allonhill called the action “wholly without merit,” and Chief Executive Officer Sue Allon said that the company is “profoundly disappointed by the OCC’s decision.” Promontory “is fully compliant” with OCC requirements, Debra Cope, a spokeswoman for the firm, said in a statement. The OCC decision will have “no significant impact” on the firm’s work, she said.
In its 2011 engagement letter with Aurora, Allonhill wrote: “None of the prior work or the potential future work will affect the independence of Allonhill in performing the Foreclosure Review.”
Other mortgage servicers that agreed to offer the independent reviews include JPMorgan Chase & Co. (JPM:US) and Citigroup Inc. (C:US) Borrowers who experienced foreclosures in that two-year span must apply by July 31 to have their foreclosures reviewed for potential errors and misrepresentations, and can do so through www.independentforeclosurereview.com.
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