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The Federal Government IS Looking Out for You!

By Joseph McDaniel, Esq.

The Federal Government is looking out for you, and that makes me happy.

Here is a press release I received today, and I hope it makes you as happy as it makes me:

 
THE WHITE HOUSE
Office of the Press Secretary
__________________________________________________________________________________________
FOR IMMEDIATE RELEASE
October 20, 2010


FACT SHEET: Federal Government Efforts to Support 
Accountability, Stability and Clarity in the Housing Market

Today the Department of Housing and Urban Development, the Department of the Treasury, the Department
of Justice, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the Securities and
Exchange Commission, the Federal Housing Finance Agency and the Office of Thrift Supervision met to
discuss ongoing interagency action to support accountability, stability, and clarity in the housing market and
residential mortgage backed securities markets. 

We are working together to review practices that do not comply with state foreclosure law or applicable
federal laws, including taking the following actions:
? The Federal Housing Administration (FHA) has been reviewing servicers for compliance with loss
mitigation requirements.  These reviews are being broadened to include a larger range of processes,
focusing in particular on servicer procedures during the final stages of the foreclosure process.  These
reviews are expected to be complete within nine weeks. 

? The Financial Fraud Enforcement Task Force, led by the Department of Justice, has brought together
more than 20 federal agencies, 94 US Attorney?s Offices and dozens of state and local partners to share
information about foreclosure and servicing practices.  The Task Force?s collaborative efforts are
ensuring that the full resources of the federal and state regulatory and enforcement authorities are
being brought to bear in addressing this issue.  

? The Financial Fraud Enforcement Task Force has also been coordinating with State Attorneys General
in their joint review of ?robo-signing? practices in foreclosure cases.  

? The Department of Justice, including through the Executive Office for U.S. Trustees, is also working
with regulators to investigate and, where appropriate, litigate against servicers, their law firms, and
third-party providers regarding their foreclosure and bankruptcy processes.  

? The Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac to remind
servicers of their contractual and legal responsibilities in foreclosure processing.  On October 13, FHFA
directed Fannie Mae and Freddie Mac to implement a policy framework for dealing with possible
foreclosure process deficiencies that requires servicers to review their foreclosure processes and fix any
processing problems they identify.  The FHFA policy framework includes specific steps servicers
should take to remedy mistakes in foreclosure affidavits so that the information contained in the
affidavits is correct and that the affidavits are completed in compliance with applicable law. 


? The Office of the Comptroller of the Currency (OCC) directed all large national bank servicers on
September 29 to review their foreclosure management processes, including file review, affidavit
processing and signatures, to ensure that the processes are fully compliant with all applicable state
laws. 

? The Office of the Comptroller of the Currency and the Federal Reserve System are jointly examining
foreclosure and securitization practices at the nation's largest servicers.  The examinations will include
intensive review of the firms? policies, procedures, and internal controls related to loan modifications,
foreclosures and securitizations, seeking to determine whether systematic weaknesses are leading to
improper foreclosures.  The reviews will also evaluate controls over the selection and management of
third-party service providers.  

? In coordination with the work of the other agencies, the Office of Thrift Supervision (OTS) is reviewing
the mortgage related policies, foreclosure processes and staffing levels of the largest servicers it
supervises.   The OTS has gathered preliminary information through its regional offices about the
servicer practices across the country.  It also issued correspondence on October 8 to all savings
associations involved in servicing residential mortgages requiring the immediate review of their actual
practices associated with the execution of documents related to the foreclosure process.  

? The Federal Deposit Insurance Corporation is participating in the reviews by the OCC, the Federal
Reserve System, and the OTS of the foreclosure and securitization practices of the largest mortgage
servicers in its role as back-up supervisor.  The FDIC also is verifying that the servicers it supervises do
not exhibit the problems that others have identified as well as reviewing the processes used by
servicers of loans subject to loss share agreements and other loans from receiverships of failed banks.
The regulators are also evaluating foreclosure and securitization practices in electronic registration
systems.

? The Federal Trade Commission (FTC) is monitoring servicers under existing public orders to confirm
proper servicing and foreclosure processes, is conducting reviews in line with past servicing abuses
and monitoring the market closely for any fraud or foreclosure scams.

? The US Treasury has implemented a strong compliance framework for the Home Affordable
Modification Program (HAMP) servicers. On October 6, Treasury issued a notice to HAMP servicers
reminding them of their requirement to comply with all applicable state and federal laws, as well as a
reminder that prior to foreclosure sale, servicers must certify to the foreclosure attorney or trustee that
all loss mitigation options have been considered and exhausted.   Treasury also recently instructed its
HAMP compliance agent to review internal policies, procedures, and processes for completing the pre-
foreclosure certifications at the ten largest servicers.

? In addition to its role enforcing the federal securities laws, the Securities and Exchange Commission
(SEC) has issued proposed rules that would provide greater transparency and disclosures in the
securitization market and provide investors with additional tools to evaluate actions in the
securitization market. 

 
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It is my sincerest hope that the intervention of the Federal Government into the mortgage foreclosure process will have great benefit to consumers, and prevent many bankruptcy filings in Arizona!

Full post as published by Arizona Bankruptcy Attorney Blog on October 27, 2010 (boomark / email).