A group of nonprofit housing industry leaders and advocates have written a letter to U.S. housing regulators calling on them to investigate alleged pro-foreclosure campaigns that they claim have been launched by several Wall Street giants.
The letter, dated April 15, is addressed to Department of Treasury Secretary Jack Lew, Federal Housing Finance Agency Director Mel Watt, and Consumer Financial Protection Bureau Director Richard Cordray. Ten housing groups signed the letter, which asks the regulators to investigate the investors for allegedly attempting to push borrowers into foreclosure instead of steering them toward loss mitigation plans
"These are many of the same Wall Street investors that contributed to the mortgage crisis and have continued their unscrupulous practices," the groups wrote in the letter. "Once again, they are putting their own economic self-interests above our communities and the sustainable growth of our nation's economy. If loan servicing companies are restricted from offering effective and common sense modifications, there will be no alternative to foreclosure, which will only aggravate an already untenable situation with blighted neighborhoods, distressed communities, and unnecessarily displaced home owners."
The letter closed with the housing groups requesting a meeting with regulators to discuss the issues presented.
"We urge you to seriously investigate and prevent these private interests from promoting policies which lead to unnecessary foreclosures," the letter said. "Access to principal reduction programs like Ocwen's Shared Appreciation Modification Program should be applauded; our communities need it. We ask you to encourage mortgage transfers to servicers who offer principal reduction as a solution to help struggling homeowners instead of other servicers who are more likely to pursue foreclosures."