Banking Department Requires Mortgage Servicers to Suspend Foreclosure Actions Pending Thorough Review
New York Serves on Executive Committee of a Multi-State Group of Regulators and Law Enforcement in Inquiry on Servicer Practices
October 13, 2010
New York, N.Y.: The New York State Banking Department has called on mortgage loan servicers to expeditiously address concerns that have arisen about faulty affidavits in foreclosure proceedings.In letters sent to more than 20 mortgage servicers registered to do business in New York State, the Department required that these companies conduct internal reviews of their foreclosure practices and suspend foreclosure actions until a thorough analysis has been completed.
The servicers were also asked to respond to the Banking Department on the following issues:
- the steps the servicer is taking or has taken to review the foreclosure process in New York;
- the results of the review, including a description of the process for verifying affidavits;
- the corrective action, if any, the servicer has taken or intends to take in response to the review;
- the measures taken to ensure that affidavits filed in New York foreclosure actions are executed in compliance with New York law; and
- the status of pending foreclosure actions in New York and measures taken to suspend such actions pending review.
The New York State Banking Department joins 50 state attorneys general and 39 banking and mortgage regulators as part of a multi-state group that is investigating the foreclosure practices of mortgages servicers throughout the country. The Department serves on the Executive Committee of the Multi-State Group.
"At a time when we need to be doing everything that we can to avoid preventable foreclosures and keep families in their homes, it is incredibly irresponsible that some servicers are not doing the bare minimum of following existing laws and properly verifying foreclosure documents,” said Richard H. Neiman, Superintendent of Banks for New York State.
A copy of the letter sent to servicers is available at http://www.dfs.ny.gov/legal/industry_circular/banking/ilmb101008.htm.
A copy of the joint statement issued today by the Multi-State Group is available at http://www.dfs.ny.gov/about/press/pr101013.htm.
The New York State Banking Department is the regulator for all state-chartered banking institutions, virtually all of the United States offices of international banking institutions, all of the State’s mortgage brokers, mortgage bankers, check cashers, money transmitters and budget planners. The aggregate assets of the depository institutions supervised by the Banking Department are more than $2.2 trillion. In addition to regulating banking institutions, the Banking Department is active in informing and educating all New Yorkers on banking matters. To contact the Banking Department, please call 1-877-BANK-NYS or visit our Web site at www.dfs.ny.gov.