Federal Deposit Insurance Corp. Chairman Sheila Bair said there is a possibility the servicing standards from both the recently signed consent orders and the ongoing negotiations with the 50 state attorneys general can be combined.
In April, major servicers signed consent orders with the Office of the Comptroller of the Currency, the Federal Reserve and the Office of Thrift Supervision to settle an investigation into mishandled foreclosures. The agreements required servicers to develop plans for how they would handle troubled borrowers in the future.
Servicers and the 50 AGs made progress during their recent settlement talks, specifically on those servicing standards. A group of Senators sent a letter to the OCC this week asking both the regulators and the AGs to work together on the reform. The OCC and the Fed pushed back the deadline for when servicers would have to submit plans for implementing new standards.
"This is being coordinated with the Justice Department and the state AGs," Bair said in testimony before the House Financial Services Committee Thursday. "There's some hope that this can all be packaged together so that there is one set of standards for both the prospective reforms to make sure we don't have these kind of problems going forward and the look back review that would identify which borrowers were harmed and could receive redress."
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