Posted on Thursday, January 20, 2011
The task force assembled by federal banking regulators to investigate the industry’s servicing and foreclosure practices is expected to release the results of its findings as early as February.
The Federal Reserve, FDIC, Office of the Comptroller of the Currency (OCC), and the Office of Thrift Supervision (OTS) teamed up to examine what officials describe as
“breakdowns” in mortgage servicing procedures after the news broke that so-called robo-signers employed by several major servicers were pushing foreclosures through the pipeline without proper documentation.
Their task force has been conducting on-site evaluations of major lenders’ servicing divisions and combing through individual loan files to assess the extent of the damage.
John Walsh, acting head of the OCC, provided the Financial Stability Oversight Council (FSOC) with an update on the investigation Tuesday. Walsh said on-site review work by task force examiners is “largely complete” and federal agencies have begun the next phase of formulating actions that should be taken to “fix problems in the mortgage servicing and foreclosure area.”
Walsh shared the task force’s preliminary findings with FSOC members Tuesday behind closed doors, but said a broader report will be made public next month. He said in addition to faulty foreclosure documentation, the task force is also looking at the extent of mortgage putbacks, or loan repurchases, lenders may be subject to as a result of poor underwriting that failed to meet investors’ standards.
By: Carrie Bay - DS News