What Is Being Done To Improve The Mortgage Market?

  • Mortgage Industry RulesCollectively, the top 10 mortgage servicers represent more than 65% of the servicing industry, or nearly $6.8 trillion in mortgage balances.
  • In April 2011, the Federal Reserve Board announced formal enforcement actions requiring 10 banking organizations to address a pattern of misconduct and negligence related to deficient practices in residential mortgage loan servicing and foreclosure processing.
  • These deficiencies represent significant and pervasive compliance failures and unsafe and unsound practices among the top mortgage servicers.
  • The actions taken in April 2011 require each servicer to take a number of corrective actions, including making significant revisions to certain residential mortgage loan servicing and foreclosure processing practices.
  • The Federal Reserve has required each servicer, among other things, submit plans to the federal reserve that:
    • Strengthen coordination of communications with borrowers.
    • Ensure that foreclosures are not pursued once a mortgage has been approved for modification. (In 2010 the Federal Government mandated that once a property had been sold via Short Sale or Foreclosure, the buyer had to “hold” the property for 90 days… This rule lasted for 3 months.)
  • Establish robust controls and oversight over the activities of third-party vendors that provide to the servicers various residential mortgage loan servicing, loss mitigation, or foreclosure-related support.
  • Provide remediation to borrowers who suffered financial injury as a result of wrongful foreclosures.
  • Strengthen programs to ensure compliance with state and federal laws regarding servicing and foreclosures.

It can be argued that many banks, lenders, and servicers were putting these and other policies in place to protect themselves. It can also be argued that these and other policies are actually holding us back and have cost us Billions!

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