Ex-Cuomo Aide Said to Be Among Possible Foreclosure Monitors By Thom Weidlich and David McLaughlin - Dec 15, 2011

  Print Back to story 

 

 

Ex-Cuomo Aide Said to Be Among Possible Foreclosure Monitors

By Thom Weidlich and David McLaughlin - Dec 15, 2011

A former aide to New York Governor Andrew Cuomo is among candidates being considered to ensure that banks including JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) comply with any settlement of a nationwide foreclosure probe, a person familiar with the matter said.
Steven M. Cohen, who was the governor’s secretary, is one potential foreclosure monitor, according to the person, who declined to be identified because the negotiations are secret. That person said North Carolina Commissioner of Banks Joseph A. Smith Jr. is also a candidate, as did a second person who asked not to be identified.
Selection of a monitor is one of the final issues to be worked out between the banks and state and federal officials, said the people. Selection of the monitor is a key issue for the regulators because success of the agreement will largely depend on his or her work, one of the people said.
Another candidate is Nicolas P. Retsinas, a former assistant secretary of the U.S. Department of Housing and Urban Development, one of the people said.
All 50 states last year said they were investigating bank foreclosure practices following disclosures that the companies were using faulty documents in seizing homes. State and federal officials leading the talks are seeking an agreement that provides mortgage relief to homeowners and sets standards for foreclosure practices.

Ensure Compliance

The monitor would ensure compliance with any agreement with mortgage servicers, according to a settlement proposal offered to the banks in March. In addition to JPMorgan and Bank of America, Citigroup Inc. (C), Ally Financial Inc. and Wells Fargo & Co. (WFC) are participating in the negotiations.
The job will come with the authority to review records and audit a servicer’s performance, according to the proposal. Banks would be subject to penalties for failing to meet performance measures and timelines.
Before becoming the governor’s secretary, Cohen was Cuomo’s counselor and chief of staff when he was New York attorney general. Cohen is now a partner at law firm Zuckerman Spaeder LLP in New York. He was also chief of the violent-gangs unit as a federal prosecutor in Manhattan.
Cohen declined to comment on whether he was a candidate for the monitor post.

Bank Commissioner

As North Carolina bank commissioner, Smith, 62, supervises mortgage companies, banks and lenders in the state. In 2010, President Barack Obama nominated Smith to oversee mortgage- finance companies Fannie Mae (FNMA) and Freddie Mac. (FMCC) His nomination to lead the Federal Housing Finance Agency won support from banks and consumer groups. Smith failed to win confirmation after objections from Senate Republicans.
Smith declined to comment on any nomination to monitor the foreclosure agreement.
Retsinas, 65, now a lecturer at Harvard Business School, is on the board of Freddie Mac and a former director of Harvard University’s Joint Center for Housing. He was an assistant secretary of HUD under President Bill Clinton. He didn’t immediately return a call seeking comment on the monitor position.
One of the people familiar with the matter said Sheila Bair, the former Federal Deposit Insurance Corp. chairman, had been approached about the job. Bair, 57, denied reports that she was a candidate for the post.

Release From Claims

As part of the settlement, banks will be released from certain claims by state and federal officials. One issue still to be worked out is the scope of the liability release agreed to between banks and the Consumer Financial Protection Bureau, one of the people said.
Geoff Greenwood, a spokesman for Iowa Attorney General Tom Miller, declined to comment on who is being considered for the monitor position. Miller is leading the talks for the states.
Both sides in the settlement negotiations have agreed to the framework of a deal, according to the two people familiar with the talks. The accord with the five largest mortgage servicers could amount to $25 billion with banks agreeing to fund refinancings and writedowns of loan principal balances, among other steps, the people said.
Lawrence Grayson, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment on the negotiations. Mark Rodgers, a spokesman for New York-based Citigroup, also declined to comment.
Gina Proia, a spokeswoman for Detroit-based Ally, and Vickee Adams of San Francisco-based Wells Fargo declined to comment. Thomas Kelly, a spokesman for New York-based JPMorgan, didn’t immediately reply to an e-mail.

Deal Value

The value of a deal would be less if California Attorney General Kamala Harris doesn’t sign on, the people said. She announced in September that she was breaking away from the talks to conduct her own investigation. The agreement would increase if more servicers are included, the people said.
U.S. foreclosure filings fell last month as delinquent homeowners got a holiday break, RealtyTrac Inc. reported. A total of 224,394 properties received notices of default, auction or repossession, down 14 percent from a year earlier, the Irvine, California-based data seller said today.
To contact the reporters on this story: Thom Weidlich in Brooklyn, New York, at tweidlich@bloomberg.net; David McLaughlin in New York at dmclaughlin9@bloomberg.net;
To contact the editors responsible for this story: John Pickering at jpickering@bloomberg.net Michael Hytha at mhytha@bloomberg.net.

®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.