U.S. banking regulators ordered an audit of more than 4 million foreclosures, then flubbed the effort, the Government Accountability Office has concluded. The $2 billion review, targeting 2009 and 2010 foreclosures, was intended to identify and compensate borrowers who lost their homes based on flawed paperwork. However, GAO found, the Federal Reserve and Office of the Comptroller of the Currency did not give the 14 mortgage servicers involved enough guidance, resulting in numerous changes and clarifications. "The complexity of the foreclosure reviews and limitations in regulators' guidance and monitoring of the foreclosure review challenged their ability to achieve the state goals," according to GAO. Ultimately, the review process was terminated this past January, with no compensation dispensed, and replaced for 11 of the servicers with a $9.3 billion settlement with banks.
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