Changes Ahead for Mortgage Servicing

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Diana Olick is off today. This post was written by Stephanie Dhue, CNBC Real Estate Producer.

Robo-signing, lost paperwork and wrongful evictions have put mortgage servicers under the gun.

Banking Committee Chairman Tim Johnson on Tuesday blamed servicers, in part, for stalling a housing recovery: “Homes that should move through the foreclosure process are held up because courts and servicers are concerned that paperwork has not been completed properly.”

To address the problem, lawmakers are considering a national standard for mortgage servicers.

The four largest — Bank of America [ BAC 9.49  -0.32 (-3.26%) ], JPMorgan Chase [ JPM 39.84  -0.60 (-1.48%) ], Wells Fargo [ WFC 27.18  -0.75 (-2.69%) ] and Ally Financial [ ALLY-PB   + (+0.00%) ] — have 60 percent of the servicing market.

The industry is urging caution. Servicers are already subject to a slew of new servicing rules from bank regulators, the FHA, Fannie Mae and Freddie Mac. And more could be on the way, as banks are in settlement talks with states attorneys’ generals.

Faith Schwartz, who heads up the industry-led Hope Now Alliance, says “it is important to understand the wide variety of rules and initiatives already in progress.”

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Article source: http://www.cnbc.com/id/43991596?__source=RSS*blog*&par=RSS

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