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Rep. Johnson chairs foreclosure hearing, blasts bankers and mortgage servicers

December 15, 2010

Congressman: ‘Incompetent bankers are throwing people out of their homes without regard for them as human beings’

Image removed.WASHINGTON, D.C. – Today, Rep. Hank Johnson (GA-04) chaired portions of the second of two full Judiciary Committee hearings on the foreclosure crisis entitled Foreclosed Justice: Causes and Effects of the Foreclosure Crisis II. During both hearings, lawmakers heard testimony about the practice of robo-signing, where lenders sign foreclosure documents with inadequate knowledge of their contents, calling into question the legitimacy of hundreds of thousands of foreclosures:

“The same incompetent bankers who came to Congress with hat in hand, demanding a bailout – the same bankers who were too incompetent to survive without welfare paid for by the American taxpayer – those same bankers have no problem summarily throwing American taxpayers out of their homes without due process, without accurate documents and without regard for the human beings whose lives are affected,” said Rep. Johnson.

“So I submit to representatives of the financial industry that our constituents, your borrowers, are human beings and need to be treated fairly during the foreclosure process.”

The hearing also explored the Mortgage Electronic Registration Systems Inc. (MERS), which operates a computer database that includes information on servicing and ownership rights of mortgage loans.

About 60 percent of the nation’s residential mortgages are recorded under MERS, instead of in the name of the bank or trust that actually owns the debt. It means for the first time, there is no public record of who owns land in each county.

The hearings are part of a continuing effort by the Judiciary Committee to address rising foreclosure rates.
Rep. Johnson said he was encouraged that earlier this month U.S. Comptroller of Currency John Walsh ordered banks to stop foreclosure proceedings if the borrower is starting or in the midst of a loan-modification program.

“More than 25 percent of loan modifications are approved after the property is sold on the steps of the courthouse,” said Johnson. “This will help prevent some foreclosures, but it won’t increase the number of people approved for modifications.”

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