The bill comes on the heels of Ranking Member Waters’ bill to prevent foreclosures on FHA Borrowers.
A decade after the devastating foreclosure crisis, Congresswoman Maxine Waters (D-CA), Ranking Member of the House Committee on Financial Services, continues the fight to ensure hardworking Americans can remain in their homes by introducing H.R. 6102, the Homeowner Mortgage Servicing Fairness Act of 2018. This bill would protect homeowners against foreclosure and increase the Federal Housing Finance Agency’s (FHFA) oversight of mortgage servicers that conduct business with Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac own or guarantee nearly 60% of all mortgage loans.
“Mortgage servicers play a critical role in determining whether homeowners experiencing financial hardships will be forced out of their homes,” said Ranking Member Waters. “However, despite the lessons learned during the foreclosure crisis, we continue to uncover evidence of bad behavior by our nation’s mortgage servicers. Borrowers can’t choose their servicer so it’s especially important that Congress provide strong protections to prevent servicers from taking advantage of borrowers and to protect borrowers from foreclosure. This bill will implement common-sense reforms to ensure that servicers are giving borrowers every possible opportunity to avoid foreclosure.”
What is the role of mortgage loan servicers?
Mortgage servicers accept mortgage payments, manage borrower escrow accounts, work on loan modifications, and initiate foreclosure proceedings. After borrowers take out mortgage loans and settle into their homes, they continue to interact with their mortgage loan servicers. Despite the critical role that mortgage servicers play in the lives of homeowners across the nation, there are still significant lapses in mortgage servicing governance, which ultimately harm borrowers and the economy.
What does H.R. 6102 do to prevent harmful mortgage servicing practices?
- Enhances FHFA oversight of servicers who conduct business with Fannie Mae and Freddie Mac;
- Requires documentation of servicer behavior and FHFA evaluation of the services provided to borrowers;
- Penalizes servicer failure to meet minimum standards established by the FHFA.
This legislation is supported by the National Consumer Law Center and the National Fair Housing Alliance.
To view the legislation text, click here.