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Here We Go Again...FHA Commissioner Warns the Mortgage Industry About Fair Lending Compliance

1 min read
Nov 2, 2010

As the foreclosure mess drags on, the mortgage industry doesn't seem to be able to do anything right. Remarks made last week to the Mortgage Bankers Association by the head of the Federal Housing Administration, Commissioner David Stevens, made clear the agency's displeasure.

In the wake of the 'robo' processing disclosures and discovery of other practices that could be considered negligent by servicers, the Administration is expanding its review from five major servicers to others. An article in Reuters quotes Stevens as saying, “The industry faces "an enormous trust deficit”.

He also condemned the industry because some bankers refuse to participate in government programs like the FHA's to refinance borrowers who are upside down on their mortgages.

"It's time for all housing industry players to move beyond rhetorical support for some of our new initiatives and reestablish trust by fully participating in them," Stevens said. "The importance of that commitment has only grown with recent foreclosure revelations."

Stevens went on to say that institutions making big profits off of low interest rates the $148 billion in taxpayer support of Fannie Mae and Freddie Mac, but not servicing existing customers is unacceptable.  The government is "creating success for these institutions and they need to participate equally as much on the other side," Stevens later told reporters.

It is obvious that financial institutions need to continue to innovate, be open and look for better solutions, or remain under attack and under increased scrutiny from regulators, watch groups, the media and the public in general.

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