Lenders Ordered To Change Foreclosure Practices
MELISSA BLOCK, Host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.
ROBERT SIEGEL, Host:
As a result, Bank of America, JPMorgan Chase and Wells Fargo, among others, will have to change the way they handle foreclosures. NPR's Tamara Keith has the story.
TAMARA KEITH: Today, the regulators took enforcement action. John Walsh is the Acting Comptroller of the Currency.
JOHN WALSH: There were a series of problems that were identified, and taken together, those problems and deficiencies were serious enough for us to rate them as unsafe and unsound banking practices, which is a sort of a high threshold.
KEITH: The banking regulators issued orders requiring 14 major mortgage firms to change the way they deal with foreclosures. Among the changes, loan servicers will be required to give borrowers in trouble a single point of contact throughout the process. And Walsh says the orders will protect borrowers from foreclosure if the bank is modifying their loan to make it more affordable.
WALSH: If you are proceeding to make payments under a trial mod, or you're moving into a full-fledged modification, you're not going to come home from work and find a notice on the door. You're not going to open your mailbox and find notices saying, you know, foreclosure is continuing in parallel.
KEITH: JPMorgan Chase said complying will require very significant changes to its mortgage servicing business. But consumer advocates and others are not impressed. Adam Levitin is a law professor at Georgetown University.
ADAM LEVITIN: The consent orders are sham settlements. The consent orders basically direct the banks to adopt do-it- yourself compliance programs.
KEITH: He says the mortgage firms should've been fined, not just told to improve, and he's not the only one.
JOHN TAYLOR: I'm underwhelmed.
KEITH: John Taylor heads the National Community Reinvestment Coalition. And he says lenders have already started making many of the changes called for in the orders.
TAYLOR: Once again, the regulators are responding to a crisis after the building has burned down. You know, they're just a little late to the dance.
KEITH: Tamara Keith, NPR News, Washington.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.