Congress Eyeing Further Servicing Mandates?

Some members of Congress are pushing for additional legislation to strengthen regulation of mortgage servicing practices and mandate additional forbearance relief for troubled borrowers. At a House Financial Services Committee hearing Friday, several Democratic lawmakers -- including Reps. Barney Frank, D-Mass.; Maxine Waters, D-Calif.; and Melvin Watt, D-N.C. -- expressed skepticism about the ability of current voluntary homeowner relief programs to stem the growing tide of foreclosures. Consumer advocate Julie Gordon of the Center for Responsible Lending said her group supports several bills that may require servicers to reduce the principal of outstanding mortgage balances in some circumstances. The group also supports legislation that would create a foreclosure "timeout" and mandate court-supervised loan modifications in some circumstances. "Despite the loss mitigation encouragement by Hope Now, the federal banking agencies, and state agencies, voluntary efforts by lenders, servicers, and investors have failed to stem the tide of foreclosures," Ms. Gordon said.