Bill Would Strengthen FHFA Over­sight of Ser­vicers

National Mortgage News - - Servicing - By Neil Haggerty

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.

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