According to John Walsh, acting comptroller of currency, in his testimony before the Senate financial committee, a review of bank foreclosures carried out during the time span of the robo-signing fiasco and prior indicates that “despite clear deficiencies…loans subject to foreclosure were, in fact, seriously delinquent and that servicers had documentation and legal standing to foreclose”. Walsh went on to say that there had been a “small number” of anomalous and inappropriate foreclosures conducted and that the FDIC, the Federal Reserve and the Office of Thrift Supervision as well as his office were “exploring appropriate remedies for consumers who have been financially harmed.” The hearing also included testimony indicating that foreclosing lenders had been in touch with the delinquent borrowers and considered and even attempted loan modifications and “other foreclosure mitigations.”
Walsh went on to say, however, that the lenders would suffer for breaking the laws. Robo-signers have been an ongoing PR nightmare for nearly every major bank since the scandal became public in September 2010 and escalated from there. The results have ranged from dramatic decreases in stock values to legislation from many state judges governing how foreclosures can be conducted in the future and what foreclosures can be carried out in the present. Some judges have already unwound foreclosures that they believe to carry inappropriate or inadequate documentation – irrevocably in some instances. Walsh assured the committee that “our actions will address identified deficiencies and will hold servicers to standards that require effective and proactive risk management and appropriate remedies for customers who have been financially harmed.” Specific lenders and remedies were not detailed in his statements.
Do you think that these “remedies” will be adequate? Should inappropriately-conducted foreclosures on seriously delinquent properties be re-visited, revoked or allowed to stand?
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