Democratic senators request documents on foreclosure practices

A group of Democratic senators on Wednesday asked several federal agencies to release information about mortgage servicers' foreclosure practices. 

Sens. Maria Cantwell (D-Wash.), Robert Menendez (D-N.J.) and eight other senators sent a letter Wednesday to the Office of the Comptroller of the Currency, the Federal Reserve and the Federal Deposit Insurance Corp. requesting information regarding each mortgage servicer’s performance in preventing illegal foreclosure practices. 

The request for disclosures also is based on concerns that the consultants performing the foreclosure reviews have conflicts of interest because they were chosen by the mortgage servicers they investigating and have done business with the firms.   

The senators are requesting public release of engagement letters, action plans, foreclosure reviews and other plans, policies or processes submitted by mortgage servicers or third-party servicers to ensure that abuses in foreclosure practices are being handled during the review process.

“We believe it is essential that the items listed above be made available to the general public or the public will lack confidence in both the foreclosure review process and results,” the senators wrote. 

The letter was sent after several news outlets reported that illegal foreclosure “robo-signing” by banks is still rampant.

Enforcement actions were initiated by federal regulators because of the “robo-signing” scandal last year that revealed many servicers were wrongfully foreclosing on homeowners and not following existing foreclosure procedures and laws.

Robo-signing is when banks falsely swear that they have reviewed property documents necessary to foreclose on a homeowner’s house.

The letter was signed by Sens. Richard Blumenthal (D-Conn.), Al Franken (D-Minn.), Daniel Akaka (D-Hawaii), Mark Begich (D-Alaska), Bernie Sanders (I-Vt.), Jon Tester (D-Mont.), Jay Rockefeller (D-W.Va.) and Sherrod Brown (D-Ohio).

All three regulators will appear before the Senate Banking Committee on Thursday for a hearing on the one-year anniversary of the enactment of the Dodd-Frank financial overhaul law.