Revelations of Foreclosure Fraud Reaffirm Importance of New Consumer Protection Bureau
Legal Services E-lert
Bibliographic Info:
Author: Andy Kroll
Source: Mother Jones Blog, “Why We Need a Consumer Protection Bureau”
Date: October 12, 2010
Mother Jones writes: “At last count, dozens of congressmen and numerous state attorneys general have demanded investigations into or have already begun scrutinizing the nation's largest mortgage companies amid allegations of deception and fraud in the foreclosure process. Several major banks—JPMorgan Chase, Bank of America—have announced freezes on foreclosures. Then, on Monday, Bloomberg reported that attorneys general in 40 states were poised to unveil a sprawling joint investigation into the use of dubious foreclosure paperwork—crucial legal filings carelessly signed in such a way that allegedly violates federal rules—at multibillion-dollar institutions like JPMorgan, B of A, and Ally Financial, formerly GMAC. What these investigations will surely lay bare, and what consumer advocates and legal aid attorneys have described for years, is the broken, fragmented system of regulation and protection that's allowed this massive foreclosure fraud to occur. To be clear, the current debacle involves the practices of companies and/or subsidiaries called mortgage servicers, the middlemen of the housing industry who take your payments, provide customer service, and handle foreclosures when a borrower defaults on his or her loan. As I've reported before, there are few cops on the beat when it comes to regulating mortgage servicers. Which is why, more than ever, the country needs the new Bureau of Consumer Financial Protection, a single watchdog to oversee not just one link but the entire complex chain of events for consumers involved with the mortgage industry.”