This past week saw much coverage of the 1 December loan disclosures from the Federal Reserve, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, so named because it was sponsored by Representative Barney Frank (Democrat, Massachusetts), shepherded by Senator Chris Dodd (Democrat, Connecticut). The act was signed into law on 21 July by President Obama, as a legislative response to the last two years’ economic meltdown engendered by the sub-prime mortgage debacle.
Less reported was the 1 December hearing Dodd held on mortgage servicing – the latest place where fraud has surfaced. Servicers, now regulated under the Dodd-Frank Act, calculate principal and interest, collect payments from the mortgagor, act as an escrow agent and foreclose in the event of default.
This makes servicers very pertinent to today’s situation, as America finds itself in the middle of a foreclosure crisis that isn’t going away.
According to an interview with law professor Kurt Eggert, who testified at the hearing, the problem is that:
“No one agency has been given the job of regulating servicers, and so any oversight has been piecemeal and haphazard. And
