The hearing, scheduled for Thursday, November 18th, will investigate the problems that have recently surfaced in the mortgage servicing industry, including improper and possibly illegal foreclosure processing. 

The Senate Banking Committee, too, plans to hold its own hearing on the matter on November 16th. Congresswoman Maxine Waters (D-California), who chairs the House subcommittee, expressed concern that the nation’s major banks themselves have revealed that improper and potentially fraudulent foreclosures have been widespread, not merely isolated incidents. Several of the largest mortgage servicers have voluntarily suspended at least some of their foreclosure proceedings to investigate their procedures. 

In a statement issued Tuesday, Waters criticized Bank of America and GMAC Mortgage for lifting their foreclosure freezes this week. “I am disappointed by Bank of America’s rush to resume foreclosures after such a short review that calls into question how it could examine more than 100,000 mortgages so quickly,” Waters said. “I am also concerned that GMAC is moving ahead with foreclosures despite an employee’s admission that he ‘robosigned’ 10,000 foreclosure affidavits a month without verifying the accuracy of the documents.” Waters continued, “There is ample evidence that homeowners have been harmed by wrongful foreclosures. Regulators need to initiate a full review of Bank of America, GMAC, and other servicers because we cannot leave it to the banks to review and police themselves.” 

In addition to hearing testimony from industry representatives, government regulators, and outside watchdogs at the November hearing, Chairwoman Waters says she wants to examine various solutions to address the nation’s strangling foreclosure crisis.

Waters recently introduced the Foreclosure Prevention and Sound Mortgage Servicing Act (H.R. 3451), which would prohibit a bank from initiating foreclosure proceedings without offering the homeowner loss mitigation. 

By: Carrie Bay, DSNews

Bernanke’s reply: There are bumps and potholes on the road to recovery, but the Fed “expects continued moderate (economic) growth, a gradual decline in the unemployment rate (to about 7 percent) and subdued inflation” over the next couple of years.

No sooner had Bernanke delivered his testimony than some of those “bumps” in the road popped up: The Commerce Department reported new housing starts dropped by 5 percent in the latest month, and the National Association of Realtors reported existing home sales down by a similar percentage.

But keep in mind the central point Bernanke was making in his forecast: Troubled though it may look with any single statistical report, the fact is the national economy continues to grow – by about two and a half percent on an annual basis – and many elements of the economy are better off this year than the were the year before.

Take the Commerce Department’s housing starts number: That five percent decline was mainly the result of a big drop in starts of new rental apartment units – not a drop in starts of new single family houses, which were stable.

In fact, the Commerce Department survey found that permits pulled by builders for future construction on single family homes were actually up in three out four of the major regions of the country. Analyzing the government’s data, Bernard Markstein, senior economist for the National Association of Home Builders, was encouraged – and predicted increases in both starts and sales over the coming several months.

The latest sales report for existing homes from the National Association of Realtors also had some bright spots: Sales in June were 10 percent higher than they were in the same month the year before. Even median prices of all homes sold were up slightly, and that’s despite the fact that one third of sales were “distressed” in some way – REOs, foreclosures or short sales.

Meanwhile, hints of a rebound in future sales emerged in the latest report on new mortgage applications to buy homes.

The Mortgage Bankers Association found that purchase applications overall jumped by 3.4 percent – and by 8 percent for FHA loans to buy houses. Those transactions won’t go to closing for two to three months … but they’re a sign of where we’re likely headed.