With US foreclosures at their lowest level in over a decade, it must be the right time to create new supervisory and enforcement authority over mortgage loan servicers, regardless of their size or type of entity or the duplicative nature of government oversight. Right? At least that is what Representative Maxine Waters (D-CA) must be thinking based on her proposed bill named the “Homeowner Mortgage Servicing Fairness Act of 2018” (the “Proposed Act”). While in the short term the Proposed Act has no chance of passage, it provides for some “safety and soundness”-type requirements that—while they do not typically apply to state-chartered, non-depository residential mortgage loan servicers—could be extended to nonbank servicers. And for federally chartered depositories, the prospect of duplicative safety and soundness exams by their provident bank regulator and the Federal Housing Finance Agency probably would not be a cause for joy. This Legal Update discusses the Proposed Act and its potential ramifications.
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