Fed’s Raskin: Mortgage Servicing Needs Serious Reform.

Fed’s Raskin: Mortgage Servicing Needs Serious Reform.

By Maya Jackson Randall

Sarah Bloom Raskin on Friday used her first public speech as a governor of the Federal Reserve Board to call for major changes to mortgage servicing, saying it’s time for “serious and sustained reform.”

Raskin, speaking at the National Consumer Law Center’s consumer rights litigation conference in Boston, said she’s deeply concerned that new questions about banks’ handling of foreclosure paperwork are part of a more widespread, long-standing problem with mortgage servicing.

“Many may view these procedural flaws as trivial, technical, or inconsequential, but I consider them to be part of a deeper, systemic problem
and am gravely concerned,” she said.

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“Mortgage servicers simply are not doing enough to provide sustainable alternatives to foreclosure,” she said, adding that the lack of action might be due to the fact that loan servicing is largely done by large servicers that are subsidiaries of depository institutions, affiliates of depository institutions, or independent companies focused primarily or exclusively on loan servicing.

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