Bloomberg News

U.S. Senators Urge OCC Coordination on Mortgage-Servicer Plans

June 14, 2011

June 14 (Bloomberg) -- Twelve U.S. senators urged the Office of the Comptroller of the Currency to work with state attorneys general and other federal agencies as it considers banks’ plans for addressing mortgage-servicing deficiencies.

The Senate Democrats, including Banking Committee Chairman Tim Johnson and Patrick Leahy, head of the Judiciary Committee, made the request after the OCC granted banks a 30-day extension to meet terms of consent orders issued on April 13. Regulators seek “action plans” from eight loan servicers including JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc.

“As the OCC assesses these action plans to determine whether they are acceptable, we urge you to work with the State Attorneys General, the Department of Justice, the Department of Housing and Urban Development, and the other authorities who are involved,” the lawmakers wrote in a letter to John Walsh, the acting comptroller of the currency.

State and federal investigators are looking into servicers’ lapses in foreclosure procedures after firms were accused of improperly seizing homes and relying on inexperienced workers who failed to track paperwork or improperly signed documents. Allegations of so-called robo-signing of legal documents led several lenders to temporarily suspend foreclosures last year.

The OCC granted the extension yesterday at the request of the Department of Justice to permit coordination by federal and state agencies in response to the servicers’ proposals.

‘Effective Framework’

“Our enforcement actions were intended to ensure that national bank servicers fix the parts of the process that were broken and provide effective remediation for borrowers,” Robert Garsson, the OCC’s spokesman, said in a statement. “Those orders can also provide an effective framework for any remedial steps that state officials believe are necessary, and we were happy to accommodate the Justice Department’s request.”

The 10 other senators who signed the letter included the second and third ranked Democrats in the Senate -- Richard Durbin of Illinois and Charles Schumer of New York -- as well as Senators Jack Reed and Sheldon Whitehouse of Rhode Island, Richard Blumenthal of Connecticut, Robert Menendez of New Jersey, Daniel Akaka of Hawaii, Sherrod Brown of Ohio, Jeff Merkley of Oregon and Al Franken of Minnesota.

--Editors: Gregory Mott, Dan Reichl

To contact the reporter on this story: Phil Mattingly in Washington at pmattingly@bloomberg.net.

To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net


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