Compliance & Regulation

The Office of the Comptroller of the Currency has ordered seven of the nation's largest residential bank servicers to review their foreclosure processes in the wake of revelations by Ally Financial that it had cut corners when taking title to homes backed by delinquent mortgages.

President Obama is still reviewing director candidates for the new Consumer Financial Protection Bureau, according to a Treasury Department official.

The Senate late Wednesday confirmed Janet Yellen and Sarah Bloom Raskin as members of the Federal Reserve Board, leaving only one vacancy on the seven-member panel.

Elizabeth Warren, the top Obama administration official in charge of setting up the Consumer Financial Protection Bureau, made it clear late Wednesday that she intends to target financial disclosures as one of her top priorities.

The House of Representatives approved a continuing funding resolution early Thursday morning that extends the $729,750 maximum loan limit for Fannie Mae, Freddie Mac and Federal Housing Administration single-family loans until Sept. 30, 2011.

The document processing problems plaguing the mortgage servicing industry could cause some foreclosures to take up to 10 years, according to Mark Zandi, chief economist for Moody's.com.

Due to growing concerns raised by the GMAC foreclosure scandal, Fitch Ratings believes loss severities on residential MBS could worsen, and is warning servicers to double-check how they foreclose on troubled loans.

With loan brokers afraid of getting squeezed by new compensation rules, one industry consultant sees a way they can collect reasonable origination fees and stay competitive: by getting borrowers to pay them directly.

The Treasury Department singled out the three largest banks — Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. — for failing to properly solicit and consider homeowners for the government's loan modification program.

Besides imposing a 5% risk retention requirement on securitizations by banks, the FDIC also spelled out new standards that are particularly tough and aimed solely at issuers of residential mortgage-backed securities.