Scribd Logo
Upload

Welcome to Scribd!

  • H. R. 4953 Mortgage Servicing Conflict of Interest Elimination Act

    Uploaded by

    Foreclosure Fraud
    616 views2 pages
    Washington, D.C. – Just moments before the House adjourned last week, Reps. Brad Miller (D-NC) and Keith Ellison (D-MN), both Members of the Financial Services Committee, introduced legislation that will eliminate a conflict of interest that may be preventing large mortgage companies from modifying troubled mortgages voluntarily. Many large mortgage companies own second mortgages on the same homes that they service. These secondary mortgages are an investment, creating a conflict of interest. The bill, H.R. 4963 – the Mortgage Servicing Conflict of Interest Elimination Act – would prohibit mortgage servicers from owning debt secured by a home that secures a mortgage that they service. Two-thirds of all distressed mortgages are now serviced by the four largest banks - Bank of America, Wells Fargo, Chase and Citibank. These banks own about $477 billion in second liens “Servicers are required to act in the best interests of the investors who own the mortgages. In many, those four banks hold interests in other debt secured by the same home that would be affected by a decision to modify the mortgage or to foreclose, placing the banks’ interests in irreconcilable conflict with the interests of investors,” said Rep. Miller “The obvious conflict of interest between the investors and servicers may well be a factor in the failure of servicers to modify mortgages voluntarily,” said Rep. Ellison. The bill gives servicers a reasonable time to divest themselves either of any interests in home mortgages, or the authority to service mortgages. The likely outcome would be that the four biggest banks would “spin off” their mortgage servicing business, which would resolve the conflict of interest between servicer and investors and result in smaller, less complex banks. ~ 4closureFraud.org

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    DOC, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Washington, D.C. – Just moments before the House adjourned last week, Reps. Brad Miller (D-NC) and Keith Ellison (D-MN), both Members of the Financial Services Committee, introduced legislation that will eliminate a conflict of interest that may be preventing large mortgage companies from modifying troubled mortgages voluntarily. Many large mortgage companies own second mortgages on the same homes that they service. These secondary mortgages are an investment, creating a conflict of interest. The bill, H.R. 4963 – the Mortgage Servicing Conflict of Interest Elimination Act – would prohibit mortgage servicers from owning debt secured by a home that secures a mortgage that they service. Two-thirds of all distressed mortgages are now serviced by the four largest banks - Bank of America, Wells Fargo, Chase and Citibank. These banks own about $477 billion in second liens “Servicers are required to act in the best interests of the investors who own the mortgages. In many, those four banks hold interests in other debt secured by the same home that would be affected by a decision to modify the mortgage or to foreclose, placing the banks’ interests in irreconcilable conflict with the interests of investors,” said Rep. Miller “The obvious conflict of interest between the investors and servicers may well be a factor in the failure of servicers to modify mortgages voluntarily,” said Rep. Ellison. The bill gives servicers a reasonable time to divest themselves either of any interests in home mortgages, or the authority to service mortgages. The likely outcome would be that the four biggest banks would “spin off” their mortgage servicing business, which would resolve the conflict of interest between servicer and investors and result in smaller, less complex banks. ~ 4closureFraud.org

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    616 views2 pages

    H. R. 4953 Mortgage Servicing Conflict of Interest Elimination Act

    Uploaded by

    Foreclosure Fraud
    Washington, D.C. – Just moments before the House adjourned last week, Reps. Brad Miller (D-NC) and Keith Ellison (D-MN), both Members of the Financial Services Committee, introduced legislation that will eliminate a conflict of interest that may be preventing large mortgage companies from modifying troubled mortgages voluntarily. Many large mortgage companies own second mortgages on the same homes that they service. These secondary mortgages are an investment, creating a conflict of interest. The bill, H.R. 4963 – the Mortgage Servicing Conflict of Interest Elimination Act – would prohibit mortgage servicers from owning debt secured by a home that secures a mortgage that they service. Two-thirds of all distressed mortgages are now serviced by the four largest banks - Bank of America, Wells Fargo, Chase and Citibank. These banks own about $477 billion in second liens “Servicers are required to act in the best interests of the investors who own the mortgages. In many, those four banks hold interests in other debt secured by the same home that would be affected by a decision to modify the mortgage or to foreclose, placing the banks’ interests in irreconcilable conflict with the interests of investors,” said Rep. Miller “The obvious conflict of interest between the investors and servicers may well be a factor in the failure of servicers to modify mortgages voluntarily,” said Rep. Ellison. The bill gives servicers a reasonable time to divest themselves either of any interests in home mortgages, or the authority to service mortgages. The likely outcome would be that the four biggest banks would “spin off” their mortgage servicing business, which would resolve the conflict of interest between servicer and investors and result in smaller, less complex banks. ~ 4closureFraud.org

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    HR 4953 IH

    111th CONGRESS

    2d Session

    H. R. 4953

    To amend the Truth in Lending Act to prohibit the servicer of a home mortgage, or any
    affiliate of the servicer, from holding any other mortgage on the property.

    IN THE HOUSE OF REPRESENTATIVES

    March 25, 2010

    Mr. MILLER of North Carolina (for himself and Mr. ELLISON) introduced the
    following bill; which was referred to the Committee on Financial Services

    A BILL

    To amend the Truth in Lending Act to prohibit the servicer of a home mortgage, or any
    affiliate of the servicer, from holding any other mortgage on the property.

    Be it enacted by the Senate and House of Representatives of the United States of


    America in Congress assembled,

    SECTION 1. SHORT TITLE.

    This Act may be cited as the ‘Mortgage Servicing Conflict Elimination Act of
    2010’.

    SEC. 2. LIMITATION ON MORTGAGES HELD BY LOAN


    SERVICERS.

    (a) Limitation- Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is
    amended--

    (1) by redesignating the second section 129, as added by section 201(b) of


    the Helping Families Save Their Homes Act of 2009 (Public Law 111-22;
    123 Stat. 1638), as section 129A; and

    (2) by inserting before section 130 (15 U.S.C. 1640) the following new
    section:

    ‘SEC. 129B. LIMITATION ON MORTGAGES HELD BY LOAN


    SERVICERS.

    ‘(a) Limitation- Neither the servicer of a residential mortgage loan, nor any
    affiliate of such servicer, may own, or hold any interest in, any other residential
    mortgage loan that is secured by a mortgage, deed of trust, or other equivalent
    consensual security interest on the same dwelling or residential real property that
    is subject to the mortgage, deed of trust, or other security interest that secures the
    residential mortgage loan serviced by the servicer.

    ‘(b) Definitions- For purposes of this section, the following definitions shall
    apply:

    ‘(1) AFFILIATE- The term ‘affiliate’ means, with respect to a servicer,


    any person or entity that controls, is controlled by, or is under common
    control with such servicer, as the Board shall prescribe by regulation.

    ‘(2) RESIDENTIAL MORTGAGE LOAN- The term ‘residential


    mortgage loan’ means any consumer credit transaction that is secured by a
    mortgage, deed of trust, or other equivalent consensual security interest on
    a dwelling or on residential real property that includes a dwelling, other
    than a consumer credit transaction under an open end credit plan or an
    extension of credit relating to a plan described in section 101(53D) of title
    11, United States Code.

    ‘(3) SERVICER- The term ‘servicer’ has the meaning provided in section
    129A, except that such term includes a person who makes or holds a
    residential mortgage loan (including a pool of residential mortgage loans)
    if such person also services the loan.

    ‘(c) Interests- For purposes of subsection (a), ownership of, or holding an interest
    in a residential mortgage loan includes ownership of, or holding an interest in--

    ‘(1) a pool of residential mortgage loans that contains such residential


    mortgage loan; or

    ‘(2) any security based on or backed by a pool of residential mortgage


    loans that contains such residential mortgage loan.’.

    (b) Clerical Amendment- The table of sections for chapter 2 of the Truth in
    Lending Act is amended by inserting before the item relating to section 130 the
    following new item:

    ‘Sec. 129B. Limitation on mortgages held by loan servicers.’.

    (c) Applicability- The amendment made by subsection (a) shall apply--

    (1) with respect to the servicer (or affiliate of the servicer) of a residential
    mortgage loan that is originated after the date of the enactment of this Act,
    on such date of enactment; and

    (2) with respect to the servicer (or affiliate of the servicer) of a residential
    mortgage loan that is originated on or before the date of the enactment of
    this Act, upon the expiration of the 12-month period beginning upon such
    date of enactment.

    4closureFraud.org

    You might also like