Fifty-two of the mortgage industry's top mortgage industry executives and participants have authored a letter directed toward the industry's regulators calling for the development of national standards originating, selling and servicing mortgage loans. The letter, authored by 52 total industry figureheads was sent directly to the leaders of the Federal Reserve Board (Ben S. Bernanke), the Federal Deposit Insurance Corporation (Sheila Bair); the U.S. Department of the Treasury (Timothy Geithner); Edward DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA); Mary L. Schapiro, chairman of the Securities & Exchange Commission (SEC); and John Walsh, acting Comptroller of the Currency.
The letter cites a number of reasons for the development of servicing standards, including the robo-signing crisis, delays in the loan modification process and illegal foreclosure proceedings.
"Problems of this magnitude are a threat not only to the economic recovery, but to the safety and soundness of all insured depository institutions," said the letter. "Servicing standards need not be overly complex, but they must address the misaligned incentives and 'tranche warfare' issues that have bedeviled mortgage servicing throughout this crisis."
Click here for a copy of the letter.