Bill Would Strengthen FHFA Oversight of Servicers
Rep. Maxine Waters, the ranking Democrat on the House Financial Services Committee, has introduced a bill intended to increase protections for homeowners facing possible foreclosure.
The bill would increase the Federal Housing Finance Agency’s oversight of mortgage servicers that conduct business with Fannie Mae and Freddie Mac. The bill comes on the heels of legislation that the California Democrat unveiled in April aimed at helping Federal Housing Administration borrowers.
“Despite the lessons learned during the foreclosure crisis, we continue to uncover evidence of bad behavior by our nation’s mortgage servicers,” Waters said in a statement. “Borrowers can’t choose their servicer so it’s especially important that Congress provide strong protections to prevent servicers from taking advantage of borrowers and to protect borrowers from foreclosure.”
Aside from increasing FHFA oversight of borrowers working with Fannie and Freddie, the bill requires documentation of servicer behavior and FHFA evaluation of the services provided to borrowers.
The legislation would also require penalties for servicers that fail to meet minimum standards established by the FHFA. It is being supported by consumer and housing groups, including the National Consumer Law Center and the National Fair Housing Alliance.
The FHA bill issued in April would require the Department of Housing and Urban Development to increase its oversight of FHA mortgage lenders in an effort to strengthen compliance with the FHA’s loss mitigation requirements. It would also establish a complaint and appeals process to provide borrowers the ability to adequately voice their concerns about unfair treatment.