FTC Investigating 'Deceptive Practices'
The Federal Trade Commission may be nearing "a significant enforcement action" involving a major mortgage servicer, according to an attorney who spoke at the Western States Loan Servicing Conference here in August.
Anand Raman, a partner at Skadden, Arps, Slate, Meagher & Flom, predicted that the FTC will announce a servicer enforcement action within the next several months.
Mr. Raman said the FTC has broad authority to scrutinize loan servicing to address "unfair and deceptive trade practices." Even practices that are not "manifestly illegal" may get servicers into trouble, he said.
Regulators are under mounting political pressure to get tough with the mortgage industry in the wake of a dramatic increase in foreclosures and controversy about origination practices in previous years.
"There is a lot of pressure to bring home scalps," Mr. Raman said during a panel session at the conference, which was sponsored by the California Mortgage Bankers Association. "Unfortunately, those servicers that are not operating at a best-practices level make easy targets." (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/