Topics In This Issue
• Federal Issues
• State Issues
• Firm News
• Consumer Finance
Excerpt from "Federal Issues"
FDIC Chairman Sheila Bair Calls for Increased Loss Mitigation and Improve Servicing Standards. On January 19, Federal Deposit Insurance Corporation (FDIC) Chairman Sheila Bair recommended several ideas to increase the availability of loss mitigation for residential mortgage borrowers and improve the performance of the mortgage servicing industry. Speaking at the Summit on Residential Mortgage Servicing for the 21st Century, Bair discussed opportunities for improvement in loss mitigation, including a single point of contact for loss mitigation and foreclosure, improved staffing and training of servicing employees, independent review of loss mitigation denials, and the creation of a fixed formula to govern the competing interests of first and second lien holders during foreclosure. Ms. Bair also recommended the creation of a "foreclosure claims commission, modeled on the BP or 9/11 claims commissions" to address harms caused by past servicer practices. To align the interests of mortgage servicers and mortgage pool investors, Ms. Bair suggested the use of new Dodd-Frank risk retention standards, including requirements that servicers for low risk "Qualifying Residential Mortgages" maximize the value of the entire mortgage pool, modify loans where default is foreseeable, require disclosure when the servicer manages both first and second mortgages, restrict commingling of mortgagor’s payments, require an independent master servicer to resolve disputes and provide oversight, cap servicer advances, and provide means other than foreclosure to repay servicers.
Please see full newsletter below for more information.
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.