WASHINGTON — U.S. Senators Jeff Merkley (D-OR) and Olympia Snowe (R-ME) today introduced the “Regulation of Mortgage Servicing Act” to help homeowners stay in their homes by making the rules for mortgage servicers more fair and transparent.
The bill would require banks and other mortgage servicers to create a single point of contact for borrowers, end the dual track process of foreclosing homes while homeowners are negotiating a modification, and provide an independent, third-party review before sending a family to foreclosure.
“Every day Oregonians call my office with horror stories of applying for mortgage modifications. Families are rejected for modification because their payments aren’t current after being told to stop making their payments so they will qualify. Families have to tell their stories again and again to different people at the servicing company. Families get foreclosed upon while they are still negotiating a loan modification,” said Merkley. “This legislation will put these bad practices to an end.”
“I am deeply troubled a myriad of foreclosures nationwide have occurred as a result of confusing communications with loan servicers and misfiled or flawed paperwork. What is deeply troubling is a number of homeowners throughout Maine, and across the nation, have gone into foreclosure in spite of their best efforts to obtain loan modifications for which they could be eligible,” said Senator Snowe. “It is critical that we restore confidence in the relationship between homeowners and the loan servicing industry and remove confusing barriers to mortgage modifications.”
Just over 1 million homes have been foreclosed on in the past year, yet housing experts conclude that there are potentially 8 – 10 million more homes heading towards foreclosure.
Co-sponsors for this legislation include Senators Jack Reed (D-RI), Dick Durbin (D-IL), Daniel Inouye (D-HI), Ron Wyden (D-OR), Bernie Sanders (I-VT), Sheldon Whitehouse (D-RI), Jeanne Shaheen (D-NH), and Richard Blumenthal (D-CT). The legislation is also supported by the following organizations: the Center for Responsible Lending, the National Consumer Law Center, the Consumer Federation of America, the National Community Reinvestment Coalition, and the National Council of La Raza.