Congresswoman Maxine Waters, Ranking Member of the House Financial Services Committee, released the following statement today in response to the announcement by the Consumer Financial Protection Bureau of a rule governing actions by mortgage servicers:

The rule is a strong first step towards limiting widespread predatory practices by the mortgage servicing industry, which have led to many American families needlessly losing their homes. It establishes rules that provide lenders with clear guidance and significantly increases protections for borrowers. It also enhances servicers’ disclosure requirements and includes provisions to help rein in the unfair practice of “forced place” insurance.

However, the rule should not be the only step toward protecting borrowers from wrongful foreclosure. First, servicers must be required to engage in loss mitigation. Also, more progress should be made in addressing the problem of “dual tracking,” by which servicers consider borrowers for loan modifications while simultaneously moving them towards foreclosure. Furthermore, homeowners must be guaranteed a more robust right to appeal when they are denied loan modifications.

In the past, bank regulators have failed to prevent servicers from aggressively pushing borrowers into foreclosure, and largely did not recognize the seriousness of the problem. The rule issued today demonstrates the importance of the Consumer Financial Protection Bureau, which was established in the Wall Street Reform and Consumer Protection Act over the objections of many people who argued that consumers needed no further protections. One of my primary objectives as Ranking Member of the Financial Services Committee will be to make sure that the law remains strong and that American families are provided adequate protections.

Congresswoman Waters has been a very strong advocate for increased consumer protections against unfair practices by mortgage servicers. In 2011, she introduced the Foreclosure Prevention and Sound Mortgage Servicing Act (H.R. 1567), which would require servicers to offer at-risk borrowers specific strategies to help them save their homes, beginning with affordable loan modifications, followed by a designated list of alternative strategies. Congresswoman Waters had introduced a nearly identical bill in 2008, long before the magnitude of predatory practices in mortgage servicing was widely recognized.

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