Today, the Senate Banking Committee reprised the issue of mortgage servicing, with Senators questioning regulators and GSE representatives on issues ranging from servicing conflicts to modification best practices. Chairman Christopher Dodd (CT), called on the FSOC to provide Congress with specific ideas and legislative language to create national servicing standards, echoing ideas suggested by FRB Governor Tarullo and FDIC Chairman Sheila Bair. Gov. Tarullo’s testimony indicated that, based on information already obtained in the ongoing interagency examination, significant enforcement actions are likely against the largest servicers. Mr. Tarullo also stated that servicer incentives for foreclosure, not modification, are creating macroeconomic risk.
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