We just e-mailed the following message, along with a spreadsheet of signatures and messages, to Timothy Geithner, Ben Bernanke, Mary Shapiro, Sheila Bair, Ed DeMarco, and John Walsh. Thanks for your interest and involvement in curbing bad practices in the mortgage arena.
My name is Yves Smith, and I run the economics-focused blog NakedCapitalism.com. I am also the author of the book Econned, and I recently published a New York Times Op-Ed piece on the foreclosure fraud scandal.
I am writing to submit thousands of names of people asking you to impose regulations on mortgage servicers as part of the risk-retention piece of the Dodd-Frank regulatory reform act. We support the Rosner-Whalen letter on mortgage servicer regulation. Over 12,000 people have signed our petition, which you can see at StopServicerScams.com.
It is quite obvious that the broken securitization market cannot be fixed without clear rules for mortgage servicing. Furthermore, regulatory failure to effectively police mortgage servicing is impairing the value of mortgage backed securities. You have the legal authority to write such rules as part of Dodd-Frank, and my readers and I encourage you to do so.
Here are several comments from signers of this petition.
“I am a former mortgage loan closer with a major bank. I am appalled at the ethical and legal violations that have gone on and continue to go on. I feel that regulation is absolutely necessary not only to protect customers, but in the end to strengthen the banks and the economy as a whole.” – Jennifer Newmark
“Allowing one segment of our society to defraud the other is hardly a recipe for economic recovery.” – Mike Nickel
“As a former banking regulatory attorney, I know how important it is to resist agency capture and the banks’ “we know best” attitude. The financial system WILL NOT CRUMBLE if regulators actually put banks’ customers first.” – David Konigsberg
I have cc’d the other members of the Financial Stability Oversight Council, and Assistant to the President Elizabeth Warren. The human cost of rogue mortgage servicing is obvious, but beyond that cost, it is clear that having a stable and healthy market for credit via securitization will require a restoration of trust and fair play by your actions.
And 12,000+ signers of the StopServicerScams.com Petition
CC: Secretary of the Treasury Tim Geithner, Department of the Treasury
Chairman Sheila Bair, Federal Deposit Insurance Corporation
Chairman Ben S. Bernanke, Board of Governors of the Federal Reserve System
Chairman Mary Shapiro, Securities and Exchange Commission
Director (Acting) Edward Demarco, Federal Housing Finance Agency
Comptroller of the Currency (Acting), John Walsh, Administrator of National Banks