Following widespread concern over the actions of a number of independent mortgage servicers, Congresswoman Maxine Waters (D-CA), top Democrat on the Financial Services Committee, has called on government regulators to take action that will protect homeowners from abuses that have led to stalled modifications, excess fees and even foreclosure.
In a letter to Comptroller of the Currency Thomas Curry and Monitor of the National Mortgage Settlement (Settlement) Joseph Smith, Waters urged careful scrutiny of the sale of mortgage servicing rights from banks to nonbank servicers. Specifically, she asked that before approving the sale of mortgage servicing rights, regulators must ensure that non-bank servicers are able to handle the increased volume in loans –and that homeowners remain protected by the terms of the 2012 National Mortgage Settlement.
Waters expressed concern about the transfer of mortgage servicing rights to nonbank servicers not subject to the Settlement, thereby eliminating important protections.
Waters wrote, “I request that you closely scrutinize all transfer of mortgage servicing rights (MSR) from banks to nonbank servicers to ensure that these nonbank servicers have the operational capacity to manage the increased volume. Additionally, I request you to exam the extent to which these servicing transfers are potentially being used to evade the modification of loans for borrowers who would benefit most from the terms of the Settlement, and to work to ensure that borrowers are not subject to any degradation in the protections afforded to them because of an MSR sale.”