Senator Owe Urges for Coordination Efforts over Bank Foreclosure Practices

Calls to look more closely at mortgage lenders’ foreclosure processes and practices further intensify. US Senator Olympia Snowe (Republican-Maine) this week sent a letter to particular federal regulators and agencies to urge for better coordination of probes into alleged anomalies over banks’ foreclosure practices. The legislator aired her concern over regulators’ seemingly ‘piecemeal efforts’ over the matter. She added that without a better oversight or strategy, the already striving housing market could be further endangered.

In her letter, Senator Snowe asks the agencies to oversee not just banks, but also the entire housing sector. This is to come out with specific plans on how concerted efforts could be combined to work collectively by November 24. The US Congress would re-convene in Washington next week. Two hearings are set to deliberate on the issue. Executives from JPMorgan Chase & Co and Bank of America have been invited to give their testimonies during the hearing of the Senate Banking Committee.

Federal and state officials are probing into numerous allegations that mortgage lenders improperly handle foreclosure processes by not thoroughly reviewing foreclosure documents. Some complainants even claim that the lenders have strategically submitted false statements just to speed up eviction of such delinquent home loan borrowers. These accusations have caused a stir that forced most major home lenders to halt their foreclosure activities since September. Bank regulators like the Federal Reserve as well as the Housing and Urban Development and the US Justice Department have already confirmed that they are looking closely into the issue.

Senator Snowe warned that without proper coordination, a unified strategic plan may not be possible, which could possibly lead to failure in addressing specified issues. She also noted that failure of the government to utilize existing authority on regulations could compromise a potential and sought-after recovery of the struggling housing market amid a downturn.

Initial data from several analysts indicate that foreclosure activities somehow fell in October due to the impact of lenders’ decision to temporarily freeze foreclosures. However, it should be noted that several homes were still foreclosed during the period. The banks are working double time to resolve the issues and are targeting to resume their foreclosure activities in several weeks. They bear the pressure to prove that the allegations are unfounded.

To read related news and get updated information on the housing market, visit ForeclosureDataBank.com.