Regulators are teaming up and advancing their review of banks' and mortgage servicers' foreclosure practices to determine whether individual homeowners were improperly kicked out of their homes.
Acting Comptroller of the Currency John Walsh said on Monday that teams from his agency, the Federal Reserve and the Federal Deposit Insurance Corp. are working together to determine the extent of the problem related to allegations that banks failed to comply with state laws as they completed foreclosure proceedings against delinquent borrowers.
Walsh said the regulators are now going into the large servicers - which include Bank of America, JPMorgan Chase and Citigroup - and are trying to verify the results of the servicers' internal reviews.
"We will look at the process, we will look at the validity of what was done and then ultimately we will look at harm to homeowners because the key here, well you have to obey the law, but the key here is to make sure they are not foreclosing on people that are not in fact in arrears on their mortgage," Walsh told reporters after a speech at the American Bankers Association's annual meeting.
All 50 states have started a joint investigation of the mortgage industry, focusing on allegations that for years banks have not reviewed documents properly or have submitted false statements to evict delinquent borrowers.
The issue mostly involves state laws but federal regulators are under pressure to show they are vigilant on the issue as well.
"There certainly is a regulatory response that is taking place I can assure you of that," he told a luncheon at the annual meeting. "I don't feel like we've talked about much else than foreclosures here for the last couple of weeks."
Reuters
Comments(0)