FTC Investigating EMC
The Federal Trade Commission's multiyear investigation into the servicing practices of EMC Mortgage Corp. has finally placed the Bear Stearns & Co. affiliate in hot water.
FTC director of consumer protection Lydia Parnes told a Senate panel that FTC staff "believes EMC and its parent, Bear Stearns, have violated a number of federal consumer protection statutes in connection with its servicing activities."
FTC staff is prepared to file a compliant against the Lewisville, Texas, servicing company, she said, but the company has agreed to "engage in discussions" that could lead to a resolution through "consent" negotiations. "The FTC cannot comment further on this ongoing law enforcement investigation," she added.
A Bear Stearns spokesman said EMC is committed to adhering to best practices in the industry. "We have been cooperating with the FTC's review and we expect to engage in further discussions regarding their concerns." The FTC launched a preliminary investigation of EMC's practices in 2005 when the company was purchasing alt-A and subprime mortgages that Bear Stearns securitized. EMC currently services $89 billion of home loans. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/