Anyone following the mortgage legal and regulatory environment too closely this past year must have found their head spinning by the end of it all. A flurry of local, state and federal legislative activity, coupled with an increasing number of threatening court cases, is changing the landscape constantly.
That environment has placed more emphasis than ever on the importance of legal counsel to the mortgage servicing industry. Law firms and legal organizations are spewing out advice to their clients in the form of position papers and through conferences. And as soon as the ink dries or the hotel shuttles leave for the airport, something new emerges from some courthouse or seat of government for the industry to mull over.
Many of the industry's concerns are centered at the state and local level today. Massachusetts recently put out new mortgage broker and lender regulations - which apply to all loans, not just the high-cost variety - and can subject lenders to double or triple damages as well as attorney fees for some violations. While many of these regulatory initiatives focus on loan origination issues, attorneys general and plaintiffs attorneys have taken note of the supposedly deep pockets of big mortgage servicers. Note the recent lawsuits in Baltimore and Cleveland that attempt to hold lenders liable for damage done to neighborhoods by increased foreclosures. Unfortunately, the phrase "predatory servicing" is gaining currency in the public debate over mortgage industry reform. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/