Rep. Cummings and Sen. Warren Call on GAO to Probe Non-Bank Servicers

Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, and Sen. Elizabeth Warren, member of the Senate Committee on Banking, Housing and Urban Affairs, called on the Government Accountability Office (GAO) to investigate threats to consumers arising from the growth in non-bank mortgage servicing.

In their letter dated Oct. 20, 2014 to U.S. Comptroller General Gene Dodaro, Cummings and Warren noted that as the non-bank share of the mortgage servicing market grew by 300 percent from 2011 to 2013, lack of servicing capacity at non-bank servicers led to increased consumer complaints and lawsuits. Non-bank mortgage servicers are not subject to the same regulatory requirements applied to banks that service mortgages, including requirements that they maintain capital reserves to cushion the impact of economic instability.

Cummings and Warren also requested that the GAO investigation answer questions about the effect on consumers and the non-bank servicing market generally should a major non-bank servicer fail.