Source: Jessica Silver-Greenberg & Ben Protess, N.Y.Times ( Free Registration )

A new report by the Government Accountability Office will take aim at the Federal Reserve and the Office of the Comptroller of the Currency for creating a bureaucratic maze that delayed relief to homeowners in foreclosure, according to a draft of the 74-page document provided to The New York Times. The regulators, the report found, designed a flawed review of troubled loans that the consultants carried out and mishandled.

Adding to the scrutiny, the Senate Banking Committee plans to hold a hearing next week to examine the foreclosure review and other recent missteps at consulting firms like Promontory Financial and Deloitte & Touche, according to several people with direct knowledge of the matter. Senator Sherrod Brown, the Ohio Democrat leading the inquiry, is expected to broadly question the quality and independence of consulting firms that are paid billions of dollars by the same banks they are expected to police.

Read Full Article: Blame abounds over flawed foreclosure review