Ohio senator introduces bill to up foreclosure mitigation
U.S. Sen. Sherrod Brown (D-Ohio) introduced a bill into the Senate Thursday to extend foreclosure mitigation services and decrease fraud in the mortgage servicing space. The Foreclosure Fraud and Homeowner Abuse Prevention Act of 2011 would protect homeowners from servicer errors, miscommunication and abusive fees; end the rush to foreclosure and require servicers to work with homeowners to achieve sustainable mortgages; and improve standards for staffing and casework by mortgage servicers. The bill also accommodates investors by offering extra protection of the interests of those investing in mortgage-backed securities and reforming the oversight that governs pools of securitized mortgages. "It is clear that the current system isn’t working and unfortunately federal regulators have failed to bring meaningful reform to the mortgaging servicing," Brown said. "We should be finding ways to keep people in their homes, not gouging homeowners and forcing more houses onto an already depressed housing market." Rep. Brad Miller (D-N.C.) sponsored and introduced the Senate bill's counterpart in the House. He believes the bill will help lead to more sustainable modifications of mortgages with principal reductions in order to help families keep their homes and avoid foreclosure. "The widespread mistakes, abuses and outright fraud by mortgage servicers must be addressed so we can get a grip on our housing market to try to stabilize it," Miller said. Rep. Elijah Cummings (D-Md.) introduced a House bill Wednesday that also pushes for more loss mitigation requirements, including modifications and borrower disclosures before servicers file a case. The Senate companion bill was introduced by Sen. Jack Reed (D-R.I.). A piece of the federal budget that was designated to facilitate loss mitigation efforts such as foreclosure counseling was cut last week under a Democrat and Republican compromise. In total, $88 million in funding was eliminated for these efforts. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.