Fed To Back New Rules To Rein In Home Foreclosure Abuses

[SpartanDem]

Source: huffpo

WASHINGTON -- The Federal Reserve has reversed its opposition to new rules reining in foreclosure abuses, and will support stronger regulations on the nation's largest banks, according to a source familiar with the matter.

The Wall Street reform legislation signed into law by President Obama in July 2010 required federal regulators to write new rules governing the broken market for mortgage bonds. Problems in the packaging and sale of mortgage bonds helped inflate the housing bubble and facilitated the sale of predatory loans nationwide. Since banks could push mortgages on borrowers and then sell them to investors, critics say that banks lacked serious incentives to ensure those loans could be repaid.

The FDIC has been pushing hard to ensure that new regulations on the mortgage bond market include clear instructions for how banks handle mortgages-- and under what circumstances they can evict delinquent borrowers. The bank divisions that collect payments from borrowers and implement the foreclosure process-- known as "mortgage servicers"-- have been plagued by rampant problems with fraudulent documentation. This fraud has resulted in everything from illegal fees charged to borrowers to improper evictions.

The Fed had opposed using the mortgage bond rules to crack down on foreclosure abuses, despite pressure from the FDIC. But FDIC General Counsel Michael Krimminger recently told the Fed his agency would not support any new mortgage bond regulations that do not include strong rules forbidding foreclosure abuses. Krimminger told HuffPost that other regulatory agencies are "moving in our direction on the issue."



Read more: http://www.huffingtonpost.com/2011/01/05/fed-caves-on-foreclosure-_n_805008.html

[naaman fletcher]

1. bullshit

the banks are comitting massive fraud. This is just another cover-up. If any of us lied in court like they did we would be in jail.

[aquart]

2. Sure. I believe it.

They'll form an oversight committee with Santa Claus and the Easter Bunny, chaired by the Great Pumpkin.

[notesdev]

3. How the Fed aims to rein in abuses

declare them not to be abuses

problem solved

[Javaman]

4. Barn door. nt