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Daily Real Estate News | May 8, 2008
Senate Hearing Puts Blame on Lenders
Witnesses testifying before the Senate Subcommittee on Administrative Oversight and the Courts battered mortgage lenders Tuesday during an investigation in foreclosure and bankruptcy.
"While bankruptcy is supposed to offer families one last chance to save their homes from foreclosure, the reality is that bankruptcy gives mortgage servicers new opportunities to engage in abusive practices," testified Katherine Porter, a University of Iowa law professor who has analyzed the system.
Sen. Charles Schumer (D-N.Y.), the subcommittee chairman, focused his criticism on Countrywide Financial, accusing the company of being "at the top of the list" of firms responsible for the national mortgage crisis.
Steve Bailey, Countrywide's chief executive for loan administration, said the company plans to hire an independent auditor to select random samples of loans in bankruptcy to review the accuracy of the company's accounting for payments by borrowers. If the company made mistakes that hurt borrowers, it will compensate them, he said.
Source: USA Today, Kevin McCoy (05/07/08)
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