OIG's Servicer Report Provokes Call for Congressional Hearing

The evaluation report released thisrnmorning by the Federal Housing Finance Agency’s (FHFA) Office of the InspectorrnGeneral (OIG) has triggered a call for a Congressional hearing.   The OIG report claimed that servicersrnemployed by Freddie Mac have not handled the serious category of consumerrncomplaint termed “escalated” in a timely manner nor reported them correctly tornFreddie Mac.  OIG also found significantrndeficiencies in the oversight of servicers by Freddie Mac and of Freddie Mac byrnFHFA and that no penalties had been imposed on services for failure to conformrnto agency and company servicing guidelines.</p

Congressman Elijah E.rnCummings (D-MD), Ranking Member of the House Committee on Oversight andrnGovernment Reform, sent a letter today to Committee Chairman Darrell Issarn(R-CA) requesting that the Committee hold arnhearing with Edward DeMarco, the Acting FHFA Director,rnand Steve A. Linick, the Inspector General of FHFA. Cummings requested that thernCommittee also invite representatives from Bank of America, CitiMortgage,rnProvident, and Wells Fargo – the mortgage servicers singled out in thernInspector General’s report as having particularly failed to follow FHFA’s requirementsrnfor handing and reporting the escalated cases they receive.  </p

“Today’s report reveals the latestrnin a sorry string of failures by FHFA leadership to protect Americanrnhomeowners,” said Cummings. “After so many reports documenting the abusesrnhomeowners have suffered at the hands of mortgage servicers, it isrnunconscionable that FHFA has failed to require mortgage servicers to properlyrnhandle tens of thousands of homeowner complaints.”</p

Cummings has had a fraughtrnrelationship with DeMarco for some time, mainly centered around FHFA’s refusalrnto allow Freddie Mac and Fannie Mae to write down principal balances onrndelinquent underwater mortgages. rnCummings recently sent a letter, signed by 44 other Democratic housernmembers, to President Obama demanding the removal of DeMarco and appointment ofrna permanent FHFA director.

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