A group of bipartisan senators headed up by Olympia Snowe, a Republican from Maine, and Jeff Merkley, a Democrat from Oregon, is placing its focus on mortgage servicers which it feels could do a much better job of managing the mortgage servicing industry.
The group has introduced legislation this past Thursday that facilitates the easier negotiation of battling homeowners with their banks.
This past April, federal bank regulators headed up by the Office of the Controller of the Currency made it necessary for the largest banks to implement reforms that are incredibly similar to those that are proposed in the Snowe-Merkley bill.
However, Merkley has stated that this step taken on the part of the OCC would not be successful.
The legislation introduced by Snowe and Merkley, known as The Regulation of Mortgaging Servicing Act, aims to provide homeowners applying for loan modifications with one contact point to deal with at their bank.
It also prevents banks from pursuing loan modification and foreclosure action at the same time, while also requiring the involvement of third-party consultation prior to a bank sending families to foreclosure.
Merkley has pointed out that banks are currently able to ignore the rulings of regulators with very little consequences.
He also stated that action required by the OCC is essentially voluntary, amounting to requests as opposed to non-negotiable demands.
The legislation introduced by this group of senators will make it impossible for banks to call on their own reviewers to determine the progress of foreclosure procedures.
Unsurprisingly, the OCC does not agree with this assessment.
It insists that its regulations are not voluntary, but rather enforceable via courts, along with the capacity that the OCC has of imposing fines of up to one million dollars per day should a bank not be in compliance.
The OCC insists that it takes the matter of holding banks responsible very seriously.
Since the housing market plummeted a few years ago, unscrupulous banks have taken advantage of homeowners in many cases.
Pursuing foreclosure while a loan modification application is pending is just one of the ways in which these banks have been victimizing homeowners.
It is the hope of this bipartisan group of senators that this legislation will strongly motivate the state attorneys general to action and usher in a much needed degree of support for struggling homeowners.
Hopefully, Merkley's proposed legislation will take effect as soon as possible and that it will be enforceable, because the homeowner seeking a loan modification will definitely benefit from the following two solutions:

1. To request that you bank provide you with one contact point when applying for a loan modification
2. You should be well aware that a foreclosure should not be pursued by your bank while a loan modification application is in progress.