Senators Urge OCC to Work with State Attorneys General, DOJ, and HUD to Hold Mortgage Servicers Accountable and Prevent Future Abuse

WASHINGTON, DC – June 16, 2011 – (RealEstateRama) — Today, a dozen U.S. Senators sent a letter to the Office of the Comptroller of the Currency (OCC) urging the agency to work with State Attorneys General, the U.S. Department of Justice (DOJ), and the U.S. Department of Housing and Urban Development (HUD) to hold mortgage servicers accountable for deficient servicing procedures and improperly foreclosing on homeowners and to develop a comprehensive solution to fix the broken foreclosure process.

Senators Jack Reed (D-RI), Richard Blumenthal (D-CT), Banking Committee Chairman Tim Johnson (D-SD), Judiciary Committee Chairman Patrick Leahy (D-VT), Sheldon Whitehouse (D-RI), Bob Menendez (D-NJ), Daniel Akaka (D-HI), Chuck Schumer (D-NY), Sherrod Brown (D-OH), Dick Durbin (D-IL), Al Franken (D-MN), and Jeff Merkley (D-OR) are calling for the OCC to use the full extent of its significant authority to ensure that the banks and mortgage servicers which created the foreclosure mess help clean it up.

The Senators wrote to John Walsh, the acting head of the OCC: “we urge you to take every opportunity to ensure that servicers not only account for past harms, but also take steps to prevent future servicing deficiencies so that homeowners going forward are treated fairly.”

After several federal agencies and State Attorneys General opened investigations into unscrupulous mortgage practices by major banks, including the use of improperly prepared legal documents and “robo-signers” to sign hundreds of unread foreclosure documents a day, the OCC entered into consent orders with several large banks outlining the widespread problems in mortgage servicing and requiring the servicers to take steps to address those problems.

Yesterday, the OCC announced that at the request of DOJ and to allow coordination of actions with other agencies at the state and federal level, it was giving banks an additional 30 days to file “Action Plans” for how they will comply with the new foreclosure requirements laid out in the OCC’s consent orders.

Because the consent orders announced by the OCC on April 13th did not preclude State Attorneys General from aggressively pursuing a comprehensive solution against banks and mortgage servicers that wrongly foreclosed upon homeowners, the Senators are urging the OCC to work with the State Attorneys General and other regulators to arrive at a comprehensive and robust solution.