John Walsh, acting Comptroller of the Currency wrote a piece on National Mortgage News:
First of all, the problems we found were extensive. Our reviews found significant weaknesses in foreclosure governance and document preparation: improper affidavits were submitted and documents were notarized improperly. Servicers devoted insufficient financial, staffing and managerial resources to foreclosure processing. Third party providers of foreclosure-related services, including outside law firms, were not adequately supervised, and, in a limited number of cases, servicers failed to ensure proper endorsement of promissory notes or mortgage documents.
As bad as the mortgage servicing breakdown was, it was not the cause of mortgage delinquencies that led to the surge in foreclosures. Rather, it was the unprecedented surge in foreclosures that exposed and exacerbated weaknesses that already existed in the process. Likewise, as we take steps to solve the processing problem and ensure that troubled borrowers receive the full protections available under federal and state laws, our actions are unlikely to fundamentally change the trajectory of the foreclosure problem.
What the reforms will do is to help restore integrity to the process. That's very important because widely reported foreclosure processing defects have not only harmed individual troubled borrowers but they have undermined confidence in the system. Given the state of the mortgage markets, taking these steps to restore confidence is a matter of urgency.
Read on.
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