Congresswoman Maxine Waters, D-Calif., a top Democrat on the Financial Services Committee, wants government regulators to take action that will protect homeowners from alleged mortgage abuses. And she wants to put the regulatory microscope on the transfer of mortgage servicing rights.
The Congresswoman outlined the abuses, which include stalled modifications, excess fees and even foreclosure, in a letter to Comptroller of the Currency Thomas Curry and Monitor of the National Mortgage Settlement Joseph Smith.
Smith is currently attending the Mortgage Bankers Association mortgage servicing conference. Smith agreed mortgage servicers should put forth more good faith toward homeowners.
"There is still a trust gap even though it is better than it was," he said.
Waters specifically wants additional regulatory scrutiny for the sale of mortgage servicing rights.
She said in the letter that regulators must ensure that nonbank servicers are able to handle the increased volume in loans responsibly.
Waters also expressed concern about the transfer of mortgage servicing rights to nonbank servicers not subject to the $25 billion national mortgage settlement, thereby eliminating important protections, the letter states.
Major nonbank servicer stocks are down on the news.
According to the HW30, a proprietary index of housing finance stock performance, Nationstar (NSM), Ocwen (OCN) and Walter Investment (WAC) are all sliding hard relative to the other stocks' performance.