Servicing

Even though the White House backed away from endorsing a national foreclosure moratorium, the issue isn't going away anytime soon — and servicers and vendors alike are worried that the 'Foreclosure-gate' scandal will continue to harm the market.

Wells Fargo Home Loans has agreed to review pending foreclosures where the borrowers are generally delinquent 10 months or more, according to a company spokeswoman.

GMAC Mortgage said it has hired several legal and accounting firms to conduct independent reviews of its foreclosure procedures in all 50 states.

Statistics aside, the credit counseling industry can hardly keep up with demand.The numbers look good, but according to the president and CEO of the National Foundation for Credit Counseling, Susan Keating, they do not tell the whole story. Numbers cannot measure what insiders call “the fatigue factor.”

There is a lot of talk about today’s improved loan quality and loans on the secondary market today are better, but recent events have clearly highlighted the need for better vetting when it comes to processing on the servicing side, and not to be overlooked as this occurs is that there is still a lot to look out for on the origination side, too.

State banking regulators and several attorneys general are forming a multi-state task force to investigate the nation's foreclosure crisis, zeroing in on whether servicers cut corners on their paperwork.

California State Assemblyman Ted Lieu, a Democrat from Torrance, has asked two state regulatory agencies to temporarily halt foreclosures for 60 days and launch an investigation into the practices of mortgage servicers even though California is a non-judicial foreclosure state.

Valuing mortgage servicing rights is tricky in normal times. The foreclosure documentation mess threatens to make the process even more difficult.

Litton Loan Servicing, the nation's fifth largest servicer of subprime mortgages, said it will halt certain foreclosures to review how its processes these delinquent loans.

Default servicing vendor Equator Financial Solutions has experienced a surge in the use of its short sale features on its servicing platform, and now the Los Angeles-based company is adding a new invoicing function to streamline payments.