Banks Illegally Foreclosed On Dozens Of Military Borrowers, Federal Investigators Say

Here is the report. Click here.

WASHINGTON -- Two of the nation's largest mortgage firms illegally foreclosed on the homes of "almost 50" active-duty military service members, according to a Thursday report by the Government Accountability Office.

The report does not identify the two mortgage companies. GAO investigators attributed the finding to federal bank regulators, who recently completed a three-month probe into allegations of improper foreclosures carried out by the nation's 14 largest home loan servicers.


The GAO report, which focused on problems in the mortgage industry and the lack of federal oversight, is the first official study to feature a partial tally of military families whose homes have been illegally seized. The 50 or so wrongful foreclosures were discovered during regulators' review of only about 2,800 loans that experienced foreclosure last year.

Read on.


The GAO report concluded that:


• Despite various federal agencies’ having the authority to oversee mortgage servicers, past oversight of mortgage servicers’ foreclosure activities has been limited and fragmented;

• It remains unclear how regulators and the new Consumer Financial Protection Bureau will share the responsibility of overseeing servicers, continuing the potential for poor and inconsistent oversight; and

• National standards for mortgage servicers that address expectations for the foreclosure process could improve the ways servicers do business.

GAO recommends that banking regulators and the Consumer Financial Protection Bureau:

• Develop plans for overseeing mortgage servicers; and

• Include foreclosure practices in any servicing standards that are developed