As you may have been following this website, reading the newspaper, or watching the news, you cannot escape the media swirl surrounding bad mortgages, deceptive mortgage tactics, mortgage backed securities, or robo-signing. Arguably, no other Governor in the U.S. has been more proactive or employed more resources to stem the flood of foreclosure's hitting the real estate market other than Governor O'Malley.
On March 8, 2011, Governor Martin O'Malley testified before the U.S. House Committee on Oversight and Government Reform. His testimony today included the following poignant comments regarding mortgage servicers:
"The current system is broken. Within a single servicer, there are multiple data systems and procedures for processing requests. There is no consistent single point of entry for submission of loss mitigation request and yet, when following the protocol set-forth by a given servicer, files are still transferred from department to department, documents are misplaced and authorizations expire. While at the same time, late fees and penalties continue to accrue and the file continues on a dual track that leads to foreclosure. To this very day, Maryland consumers consistently report that servicers repeatedly lose paperwork and take extended amounts of time to answer even basic inquiries about their eligibility for a loan modification. The recent ""robo-signing"" scandal is a symptom of an industry in crisis. Many in the industry quickly mischaracterized the use of faulty affidavits in the foreclosure process as a mere technicality. This is not the case. I caution that the defective affidavits relied upon by the courts in foreclosure proceedings, as uncovered through the ""robo-signing"" scandal, are just one more concrete example of the overall failings of the industry."
"Simply put, the scandal illustrates another symptom of an industry that needs accountability and transparency in its operations. Mortgage loan servicing is a critical function -- linking the homeowner, secured party, escrow agent and insurer and with broader reach imparting direct influence on overall market performance. It is, therefore, critical that the infrastructure at these institutions is strong, with strong incentives for increased efficiency, sufficient internal controls and accountability in operations. Timely customer service must be a goal that is tracked, not something that matters only when an elected official such as Congressman Cummings or me brings a case to a lender''s attention."
To have such a high power political figure testify to Congress as to the wrongs committed by these servicers simply illustrates the magnitude and scope of the current crisis.
Stay tuned as information develops!