In her first public comments since her confirmation to the position of Federal Reserve Governor, Sarah Bloom Raskin kept the tone gloomy, saying that there is too great a “dark shadow” on the mortgage servicing industry to allow anyone to predict a particularly bright outlook for the immediate future. In fact, Raskin said, mortgage foreclosures in the U.S. could be at 2.25 million in 2010, the same levels in 2011 and then still around 2 million in 2012[1]. She continued in a similarly light tone, emphasizing that the procedural issues that have come to light of late in the industry – “lost paperwork, slow response times and sloppy record keeping” – give her cause for “grave concern.”

Raskin declared a major review of the foreclosure process at many of the country’s major banks, and expressed hope that the Fed would “have more information about the extent and significance of these very troubling practices” once the review was completed. She emphasized that these issues must be addressed and resolved in order to protect undeserving homeowners from foreclosure and also in order to stabilize neighborhoods, many of which have already been destabilized by declining home values and a “glut of vacant and abandoned properties,” Raskin said. Additional firms have been asked to conduct their own self assessments of policies and procedures, she added, refusing to make any positive predictions until the results from these reviews and those conducted by the Fed itself come in.

[1] http://in.reuters.com/article/idINIndia-52881920101112