Springer-Lyle News Updates

latest legal news from the law firm of Springer-Lyle

1807 Westminster
Denton, TX 76205

940.387.0404

  • Home
  • About Us
    • Firm Overview
    • Attorney Profiles
  • Areas of Practice
  • Articles and Cases
  • What’s In the News
  • Resources
  • Videos
    • Who is Springer-Lyle?
    • FAQ Videos
      • FAQs on Business Litigation
      • FAQs on Healthcare, Medical & Pharmaceutical Cases
      • FAQs on Personal Injury, Automobile & Trucking Accidents
      • FAQs on Alternative Dispute Resolution
      • FAQs on Probate Cases
  • Contact Us
You are here: Home / Blog Articles / Real Estate / State attorneys general tackle mortgage servicing

State attorneys general tackle mortgage servicing

April 25, 2011 By admin Leave a Comment

From the Washington Post

By Brady Dennis, Thursday, March 17, 9:00 PM

State attorneys general, who soon will enter settlement talks with the nation’s largest mortgage servicers after revelations of flawed foreclosure paperwork and other shoddy practices, will accept nothing less than wholesale changes to the way those companies treat troubled homeowners, the group’s leader said Wednesday.

“We’re trying to shift the servicing industry from [being] a dysfunctional one to a functional one,” Iowa Attorney General Tom Miller, who’s heading up the 50-state coalition, said in an interview. “If we can get something that changes the direction of servicing, then that’s what we’ll do. If we don’t, then we’re not going to settle.”

Miller said he thinks it’s “more likely than not” that the attorneys general and officials from nearly a dozen federal agencies will reach an agreement with banks.

“It’s really in everybody’s interest to settle this,” he said. But he acknowledged that given the contentious issues and numerous parties involved, “Things could blow up and get off track; that’s always possible.”

Miller praised the “cohesion and collegiality” of his state and federal counterparts, but acknowledged that a consensus so far remains elusive, as evidenced by several attorneys general who have voiced opposition to a 27-page “term sheet” submitted to banks earlier this month.

“There’s a great deal of diversity of opinion and personality; we all recognize that,” he said, adding that he hoped that a final settlement would find wide acceptance.

The proposal — presented to Bank of America and Wells Fargo, among others — attempts to address the most common complaints about the mortgage servicing process, such as lost paperwork, long delays, misinformation and lack of feedback from the servicers.

It spells out the timeline that servicers must adhere to when borrowers apply for a modification and the conditions under which servicers should consider reducing a borrower’s loan principal. It also requires servicers to provide a single point of contact for borrowers looking to rework their loans and develop a portal those borrowers can use to submit and track their documents electronically in real time. Servicers would not be allowed to move forward with a foreclosure if they are already negotiating a loan modification on that property.

The plan has come under attack by some Republicans, who say it was designed to bypass Congress and revive initiatives that lawmakers have rejected, including a push to allow bankruptcy court judges to reduce the loan principals for troubled borrowers.

Banks also have balked at the initial proposal, saying that many of the changes would prove unwieldy and raise fairness questions about which homeowners deserve loan modifications or principal write-downs, and which do not.

This week, the Securities Industry and Financial Markets Association said the proposal “would put at risk mortgage-backed securities investors who stand to absorb the losses from significantly extended foreclosure timelines.”

Miller, a veteran of negotiations with the tobacco industry and Microsoft, called such criticisms from the banking industry little more than a negotiation tactic. “We don’t place a lot of stock in that,” he said, while acknowledging that the term sheet was basically an opening bid for the looming negotiations.

Miller insisted that while a greater emphasis on loan modifications and principal write-downs have a place in any settlement, changing the servicing model going forward remains the key aim. He also said it is likely that servicers will face penalties for their poor practices, but said the precise amount and how it would be used remains undetermined. “We want to get it right,” Miller said of the ongoing debate over those fines.

He also defended Elizabeth Warren, the Harvard professor who is leading the creation of the Consumer Financial Protection Bureau and has come under fire from Republicans who say she and her agency should not be involved in the talks because the bureau doesn’t assume its regulatory powers until July.

“It’d be sort of senseless to say we shouldn’t talk to them,” Miller said, noting that the bureau will soon have broad authority to regulate mortgage servicers. “Except by Washington rules, it should be obvious that she and the bureau have a role in this.”

Miller said the negotiations with banks could take weeks or months, but he plans to move as quickly as possible.

“Time really is of the essence here,” he said. “It’s important that homeowners and the housing market get the reforms now rather than a year from now.”

 

Staff writer Dina ElBoghdady contributed to this report.

Filed Under: Real Estate Tagged With: Attorney, consumers, Denton, Real Estate, Settlement, Texas

Leave a Reply Cancel reply

You must be logged in to post a comment.

Subscribe by email

Have the latest news from Springer-Lyle
sent to your inbox.

Articles of Interest

Top Five Things To Look For When Hiring A Personal Injury Attorney

Many lawyers hold themselves out as personal injury attorneys, but what are the top 5 things to look for in hiring a personal injury lawyer?  You’ll find all of those qualities here … [Read More…]

Will Not Wearing A Seat Belt Affect My Personal Injury Claim?

Wearing a seat belt can save your life, but can it also save your personal injury case?  If you’re hurt in a car accident that’s not your fault, you would like to be compensated for your … [Read More…]

Why are Truck Accidents on the Rise in Texas?

According to a report by the American Trucking Association (ATA) released in October 2017, there is a serious shortage of truck drivers nationwide. ATA estimated the shortage would be 50,000 by the … [Read More…]

Drowsy Driving Accidents

According to the National Highway Traffic Safety Administration in 2015, over 100,000 motor vehicle crashes are directly attributable to driver fatigue every year. Those are only the drowsy driving … [Read More…]

Springer & Lyle, LLP

1807 Westminster
Denton, TX 76205

phone: 940.387.0404
toll-free: 855.387.0404
fax: 940.383.7656

Disclaimer
The contents of this website does not imply legal advise or counsel and does not establish an attorney/client relationship. Please contact us for information on our policies regarding any relationship with clients, potential clients, or non-clients of our firm.

  • Facebook
  • RSS
  • Twitter
  • YouTube

 

 

make a Pament via LawPay

Return To Top of Page

Copyright © 2023 Springer & Lyle, L.L.P. • • • All Rights Reserved

Website Design by The Crouch Group

Log in