Robo-signing, Chain of Title, Loss Mitigation, and Other Issues in Mortgage Servicing : Hearing Before The Subcommittee On Housing And Community Opportunity Of The Committee On Financial Services U.S. House Of Representatives One Hundred Eleventh Congress

376 Pages·2011·6.677 MB·English

by  Committee on Financial Services

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Citation:
[i] (2010) <br> <span class="cite_title">
Robo-signing, chain of title, loss mitigation, and
other issues in mortgage servicing : hearing before the
Subcommittee on Housing and Community Opportunity of
the Committee on Financial Services, U.S. House of
Representatives, One Hundred Eleventh Congress, second
session, November 18, 2010. </span>(cid:10)(cid:10)(cid:10)(cid:10)(cid:10)(cid:10)(cid:10)
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ROBO-SIGNING, CHAIN OF TITLE,
LOSS MITIGATION, AND OTHER ISSUES
IN MORTGAGE SERVICING
HEARING
BEFORE THE
SUBCOMMITTEE ON
HOUSING AND COMMUNITY OPPORTUNITY
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
NOVEMBER 18, 2010
Printed for the use of the Committee on Financial Services
Serial No. 111-166
ROBO-SIGNING, CHAIN OF TITLE, LOSS MITIGATION,
AND OTHER ISSUES IN MORTGAGE SERVICING
ROBO-SIGNING, CHAIN OF TITLE,
LOSS MITIGATION, AND OTHER ISSUES
IN MORTGAGE SERVICING
HEARING
BEFORE THE
SUBCOMMITTEE ON
HOUSING AND COMMUNITY OPPORTUNITY
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
NOVEMBER 18, 2010
Printed for the use of the Committee on Financial Services
Serial No. 111-166
U.S. GOVERNMENT PRINTING OFFICE
63-124 PDF WASHINGTON : 2011
For sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free [phone]; DC area [phone]
Fax: [phone] Mail: Stop IDCC, Washington, DC 20402-0001
HOUSE COMMITTEE ON FINANCIAL SERVICES
BARNEY FRANK, Massachusetts, Chairman
PAUL E. KANJORSKI, Pennsylvania SPENCER BACHUS, Alabama
MAXINE WATERS, California MICHAEL N. CASTLE, Delaware
CAROLYN B. MALONEY, New York PETER T. KING, New York
LUIS V. GUTIERREZ, Illinois EDWARD R. ROYCE, California
NYDIA M. VELAZQUEZ, New York FRANK D. LUCAS, Oklahoma
MELVIN L. WATT, North Carolina RON PAUL, Texas
GARY L. ACKERMAN, New York DONALD A. MANZULLO, Illinois
BRAD SHERMAN, California WALTER B. JONES, JR., North Carolina
GREGORY W. MEEKS, New York JUDY BIGGERT, Illinois
DENNIS MOORE, Kansas GARY G. MILLER, California
MICHAEL E. CAPUANO, Massachusetts SHELLEY MOORE CAPITO, West Virginia
RUBEN HINOJOSA, Texas JEB HENSARLING, Texas
WM. LACY CLAY, Missouri SCOTT GARRETT, New Jersey
CAROLYN McCARTHY, New York J. GRESHAM BARRETT, South Carolina
JOE BACA, California JIM GERLACH, Pennsylvania
STEPHEN F. LYNCH, Massachusetts RANDY NEUGEBAUER, Texas
BRAD MILLER, North Carolina TOM PRICE, Georgia
DAVID SCOTT, Georgia PATRICK T. McHENRY, North Carolina
AL GREEN, Texas JOHN CAMPBELL, California
EMANUEL CLEAVER, Missouri ADAM PUTNAM, Florida
MELISSA L. BEAN, Illinois MICHELE BACHMANN, Minnesota
GWEN MOORE, Wisconsin KENNY MARCHANT, Texas
PAUL W. HODES, New Hampshire THADDEUS G. McCOTTER, Michigan
KEITH ELLISON, Minnesota KEVIN McCARTHY, California
RON KLEIN, Florida BILL POSEY, Florida
CHARLES A. WILSON, Ohio LYNN JENKINS, Kansas
ED PERLMUTTER, Colorado CHRISTOPHER LEE, New York
JOE DONNELLY, Indiana ERIK PAULSEN, Minnesota
BILL FOSTER, Illinois LEONARD LANCE, New Jersey
ANDRE CARSON, Indiana
JACKIE SPEIER, California
TRAVIS CHILDERS, Mississippi
WALT MINNICK, Idaho
JOHN ADLER, New Jersey
MARY JO KILROY, Ohio
STEVE DRIEHAUS, Ohio
SUZANNE KOSMAS, Florida
ALAN GRAYSON, Florida
JIM HIMES, Connecticut
GARY PETERS, Michigan
DAN MAFFEI, New York
JEANNE M. ROSIANOWICK, Staff Director and Chief Counsel
(II)
SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPORTUNITY
MAXINE WATERS, California, Chainvoman
NYDIA M. VELAZQUEZ, New York SHELLEY MOORE CAPITO, West Virginia
STEPHEN F. LYNCH, Massachusetts THADDEUS G. McCOTTER, Michigan
EMANUEL CLEAVER, Missouri JUDY BIGGERT, Illinois
AL GREEN, Texas GARY G. MILLER, California
WM. LACY CLAY, Missouri RANDY NEUGEBAUER, Texas
KEITH ELLISON, Minnesota WALTER B. JONES, JR., North Carolina
JOE DONNELLY, Indiana ADAM PUTNAM, Florida
MICHAEL E. CAPUANO, Massachusetts KENNY MARCHANT, Texas
PAULE. KANJORSKI, Pennsylvania LYNN JENKINS, Kansas
LUIS V. GUTIERREZ, Illinois CHRISTOPHER LEE, New York
STEVE DRIEHAUS, Ohio
MARY JO KILROY, Ohio
JIM HIMES, Connecticut
DAN MAFFEI, New York
(III)

CONTENTS
Page
Hearing held on:
November 18, 2010 1
Appendix:
November 18, 2010 75
WITNESSES
THURSDAY, NOVEMBER 18, 2010
Anastasi, Anne, President, American Land Title Association ............................. 64
Arnold, R.K., President and CEO, Mortgage Electronic Registration Systems,
Inc. (MERS) .......................................................................................................... 47
Caldwell, Phyllis, Chief, Homeownership Preservation Office, U.S. Depart-
ment of the Treasury ........................................................................................... 7
DeMarco, Edward J., Acting Director, Federal Housing Finance Agency .......... 14
Duke, Hon. Elizabeth A., Governor, Board of Governors of the Federal Re-
serve System ......................................................................................................... 9
Fisher, Linda E., Professor of Law, Seton Hall University School of Law ......... 62
Gordon, Julia, Senior Policy Counsel, Center for Responsible Lending .............. 60
Jones, Alan, Manager of Operations, Wells Fargo Home Mortgage Servicing ... 44
Levitin, Adam J., Associate Professor of Law, Georgetown University Law
Center .................................................................................................................... 56
Lewis, Harold, Managing Director, Citi Mortgage ................................................ 46
Mairone, Rebecca, Default Servicing Executive, Bank of America Home
Loans ..................................................................................................................... 40
Marano, Thomas, CEO of Mortgage Operations, Ally Financial Inc. .................. 41
Mudick, Stephanie, Head, Office of Consumer Practices, JPMorgan Chase ...... 43
Sanders, Anthony B., Professor of Finance, and Distinguished Professor of
Real Estate Finance, School of Management, George Mason University ........ 58
Stevens, Hon. David H., Assistant Secretary for Housing/FHA Commissioner,
U.S. Department of Housing and Urban Development ..................................... 11
Walsh, John, Acting Comptroller of the Currency, Office of the Comptroller
of the Currency ..................................................................................................... 13
APPENDIX
Prepared statements:
Anastasi, Anne .................................................................................................. 76
Arnold, R.K. ...................................................................................................... 91
Caldwell, Phyllis ............................................................................................... 17 4
DeMarco, Edward J. ......................................................................................... 186
Duke, Hon. Elizabeth A. .................................................................................. 199
Fisher, Linda E. ................................................................................................ 213
Gordon, Julia .................................................................................................... 219
Jones, Alan ........................................................................................................ 252
Levitin, Adam J. ............................................................................................... 262
Lewis, Harold .................................................................................................... 292
Mairone, Rebecca .............................................................................................. 300
Marano, Thomas ............................................................................................... 307
Mudick, Stephanie ............................................................................................ 316
Sanders, Anthony B. ........................................................................................ 323
Stevens, Hon. David H. .................................................................................... 328
Wal sh, John .... ... .... .... .... .... ... .... .... .... ... .... .... .... ... .... .... .... ... .... .... .... .... ... .... .... .... 336
(V)
VI
Page
ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD
Waters, Hon. Maxine:
Written responses to questions submitted to Edward J. DeMarco 355
Written responses to questions submitted to Harold Lewis ......................... 357
Written responses to questions submitted to Thomas Marano .................... 360
Written responses to questions submitted to Stephanie Mudick ................. 363
Written responses to questions submitted to John Walsh ............................ 367
ROBO-SIGNING, CHAIN OF TITLE,
LOSS MITIGATION, AND OTHER ISSUES
IN MORTGAGE SERVICING
Thursday, November 18, 2010
U.S. HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON HOUSING AND
COMMUNITY OPPORTUNITY,
COMMITTEE ON FINANCIAL SERVICES,
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:05 a.m., in room
2128, Rayburn House Office Building, Hon. Maxine Waters [chair
woman of the subcommittee] presiding.
Members present: Representatives Waters, Lynch, Cleaver,
Green, Ellison, Donnelly, Kilroy, Himes; Biggert, Miller of Cali
fornia, and Neugebauer.
Ex officio present: Representatives Frank and Bachus.
Also present: Representatives Watt, McCarthy of New York, Mil
ler of North Carolina, and Speier.
Chairwoman WATERS. This hearing of the Subcommittee on
Housing and Community Opportunity will come to order.
Good morning, ladies and gentlemen. I would like to thank our
ranking member and other members of the Subcommittee on Hous
ing and Community Opportunity for joining me today for this hear
ing entitled, "Robo-Signing, Chain of Title, Loss Mitigation, and
Other Issues in Mortgage Servicing."
This hearing is about the failure of the mortgage service industry
to uphold due process, to obey the law, and to live up to its oft
stated goal of preventing foreclosures. This hearing is about the
aftermath of what happens when an industry is essentially broken.
It is also about what happens when our regulators do nothing to
pick up the pieces.
Since foreclosures started to spin out of control in 2007, I have
been sounding the alarm about problems in the mortgage servicing
industry. Working directly with homeowners, I have seen firsthand
the problems they create for borrowers trying to obtain a loan
modification, lost paperwork, incorrect information, incorrect fax
numbers, and flat-out lies. Therefore, the recent allegations of fore
closure fraud and robo-signing don't surprise me at all. In fact, I
believe that we are seeing foreclosure fraud and robo-signing for
the same reasons that we are seeing problems with homeowners
unable to receive loan modifications; it is because it is in the
servicers' financial interest to foreclose. They want to foreclose as
quickly as possible no matter the consequences.
(1)