Dems Call for Bank Investigations

Congresswoman Lois Capps (CA-23) this week joined the California Democratic Congressional Delegation in urging Attorney General Holder, Federal Reserve Chair Bernanke, and Acting Comptroller of the Currency Walsh to investigate systemic wrongdoing by financial institutions in their handling of delinquent mortgages, mortgage modifications, and foreclosures.

Delegation members have received thousands of complaints from their constituents, which appear to outline a clear pattern of misconduct on the part of lenders and servicers. Recent press accounts have also reinforced the view that these institutions are routinely failing to respond in a timely manner, misplacing requested documents, and misleading both borrowers and the government about loan modifications, forbearances, and other housing related applications.

“The foreclosure crisis has affected thousands of Central and South Coast families. And while foreclosures clearly hurt the affected families most, they also often drive down all property values in a neighborhood, affecting responsible homeowners who have never had any trouble keeping current with their mortgages,” said Capps. “All of us have heard awful stories about the numerous hurdles placed before homeowners trying to work out their loans and there have been far too many reports of questionable practices by some financial institutions. We need to get to the bottom of this problem.”

In recent weeks, several large lenders have acknowledged problems with foreclosure filings, including potentially forged documents and the practice of employing “robo-signers” who signed off on thousands of evictions every month without verifying their accuracy.