Yet Further Congressional Hearings on the Foreclosure Crisis

As reported in the media, the House Committee on the Judiciary held a further hearing on the mortgage foreclosure crisis on December 15, 2010. The witness list included Senator Sheldon Whitehouse (D-RI). It is reported that Senator Whitehouse is seeking "to introduce legislation early next year that would give [Bankruptcy Court] judges comfort that they have the authority to force parties, including banks, to the table to discuss modifications."

Senator Whitehouse noted that in today's "age of securitization, the [mortgage] servicer merely serves as processing agent and may not work in the interests of the people who actually own the mortgage and in the age of corporate bureaucracy, the left hand may not know what the right hand is doing." He further reviewed his efforts to give bankruptcy court judges the power to modify mortgage on principal residences just as they are able to for other loans including those on vacation homes, cars, and boats. He reviewed efforts in various Bankruptcy Court loan mitigation programs and some mortgage servicer challenges thereto. He noted his proposal to pass legislation to clarify the power of Bankruptcy Courts to run foreclosure loss mitigation programs.

HAMP has "Failed to Make a Dent in the Foreclosure Crisis"

Today the Congressional Oversight Panel issued its oversight report of over 170 pages reviewing the Department of Treasury's Foreclosure Prevention Programs. The report reviews where HAMP stands today, reviews the future of HAMP, and sets forth conclusions and recommendations. Annex I to the report reviews lessons from the Home Owners' Loan Corporation of the 1930s and 1940s. The report states that despite the tweeking of HAMP since its April 2010 report, the concerns with the program have not been resolved. The report states that it presently estimates that HAMP will "prevent only 700,000 to 800,000 foreclosures - far fewer than the 3 to 4 million foreclosures that Treasury initially aimed to stop, and vastly fewer than the 8 to 13 million foreclosures expected by 2012." It further notes that since "Treasury's authority to restructure HAMP ended on October 3, 2010, the program's prospects are unlikely to improve substantially in the future." The report concludes that HAMP has failed to "make a dent in the foreclosure crisis" and that Treasury has "failed to acknowledge HAMP's shortcomings in time."

Professor Levitin Refutes the American Securitization Forum

Professor Adam Levitin posted this blog post on Creditslips.org refuting the position of the Tom Deutsche of the American Securitization Forum's testimony before the Senate Banking Committee last week. Professor Levitin also recently testified before Congress on November 16, 2010 and November 18, 2010.
One of the important involved issues is the "chain of title" problem in mortgage securitization, including whether an endorsement is required from every party in the securitization chain.

Yet More Congressional Hearings on Foreclosure Crisis

The House Committee on the Judiciary held a hearing on "Foreclosed Justice: Causes and Effects of the Foreclosure Crisis" today. Yesterday, the Senate Banking Committee held hearings on the foreclosure crisis. Further hearings are scheduled for December 8, 2010.

Among the speakers were officials from

• Department of Treasury
• Federal Housing Finance Agency
• Comptroller of the Currency
• New York State Supreme Court Judge F. Dana Winslow
• Louisiana Bankers Association
• American Securitization Forum
• Professor Christopher L. Peterson, University of Utah

Among the issues addressed were:standing to foreclose, "Robo-signing", MERS, and projected future foreclosures. Rep. John Conyers (D-Mich.) stated some project that up to 13 million more homes will be lost to foreclosure before the crisis is over.

Senate Hearing on "Problems in Mortgage Servicing - Part II"

The Senate Committee on Banking, Housing, and Urban Affairs will be holding a hearing on "Problems in Mortgage Servicing from Modification to Foreclosure, Part II" today.

The witnesses include representatives from

• US Treasury
• FDIC
• Federal Reserve
• Comptroller of the Currency
• FHFA
• Fannie Mae
• Freddie Mac
• American Sercuritization Forum
• Professor Kurt Eggert, Professor of Law

In 2007, Professor Eggert wrote on article entitled "Limiting Abuse and Opportunism by Mortgage Servicers"