When the Obama Administration released the Treasury’s white paper to propose reforms to the national housing finance market, it also called for the establishment of national standards for mortgage servicing. The paper put forth a set of basic proposals to reform mortgage servicing and foreclosure processing practices but stopped short of comprehensive and detailed solutions. Recently, however, Acting Chairman of the Office of the Comptroller of the Currency, John Walsh, went further and provided the first glimpse in his testimony at the Senate Banking Committee of what could form the backbone of national mortgage servicing standards.
These new standards come on the heels of reports that federal regulators will be taking legal action against the 14 largest U.S. mortgage servicers for failure to comply with foreclosure laws and for the pervasive problems that arose out of processing foreclosures. Also, a new NERA study looks at the economic implications of foreclosure suspensions and potential litigation related to problems associated mortgage servicing and foreclosure processing.
James Nguyen, National Mortgage Servicing Standards and Looming Litigation, Berkeley Bus. L.J. Network (February 23, 2011), http://thenetwork.berkeleylawblogs.org/2011/02/23/national-mortgage-servicing-standards-and-looming-litigation/.