Senators looking into bankruptcy practices of nation's top mortgage servicers
U.S. Senators Richard Blumenthal and Patrick Leahy are looking into the practices of some of the top mortgage servicers in the country regarding the servicers' policies on foreclosures in bankruptcy courts.
U.S. Senators Richard Blumenthal and Patrick Leahy are looking into the practices of some of the top mortgage servicers in the country regarding the servicers' policies on foreclosures in bankruptcy courts.
The two Democrats sent letters requesting information from 11 mortgage servicers on the heels of a recent Executive Office of the United States Trustee review. The review suggested that errors in proofs of claim in bankruptcy courts may be more prevalent than originally disclosed, according to MortgageOrb.
“I am very concerned that homeowners who are compelled to turn to the bankruptcy process far too often face serious misconduct by mortgage servicers,” Leahy said in a statement. “We need a full understanding of the mortgage servicing policies and practices at the heart of these problems.”
According to the news source, the U.S. Trustee Program found that one-fifth of the program's 95 field offices reviews all of the contested motions and claims for relief from stay in cases where protection under Chapter 13 bankruptcy law is sought.
The EOUST review suggests an error rate 10 times larger than the one percent error rate that was testified before a Senate panel, the news source states.
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