Yesterday, the Federal Housing Finance Agency released a policy framework designed to deal with possible foreclosure process deficiencies. The policy framework focuses on:
- Process verification - the policy framework requires that mortgage servicers review their processes and procedures and verify that all documents are completed in compliance with legal requirements.
- Remediation of actual problems - the policy framework requires mortgage servicers, upon identification of a foreclosure process deficiency, to remediate the deficiency in a appropriate, timely and sustainable way.
- Referral of suspicion of fraudulent activity - the policy framework reminds mortgage services that they are required to meet applicable legal reporting obligations in circumstances involving possible fraudulent activity.
- Avoidance of delay - the policy framework states that, absent identified process problems, foreclosures on mortgages for which the borrower has stopped payment, and for which foreclosure alternatives have been unsuccessful, should proceed without delay.
The FHFA’s Policy Framework for Dealing with Possible Foreclosure Process Deficiencies follows recent statements by the White House and members of congress expressing concern with deficiencies in the foreclosure process and roughly coincided with the announcement of the 50-state attorney general working investigating concerns about faulty foreclosure affidavits].