Woolsey, California Democrats Call For Investigation of Financial Institutions’ Handling of Foreclosures, Mortgages

Washington, D.C. – October 6, 2010 – (RealEstateRama) — Rep. Lynn Woolsey, D-Petaluma, and 30 other members of the California Democratic Congressional Delegation sent a letter Tuesday to the Attorney General, Federal Reserve Chairman, and the Comptroller of the Currency requesting investigations into possible systemic wrongdoing by financial institutions in their handling of delinquent mortgages, mortgage modifications, and foreclosures.

Woolsey and other delegation members have received thousands of complaints from their constituents, which appear to outline a pattern of misconduct on the part of lenders and servicers. Recent press accounts have also reinforced the view that these institutions are routinely failing to respond in a timely manner, misplacing requested documents, and misleading both borrowers and the government about loan modifications, forbearances, and other housing related applications.

“Although financial institutions received government incentives to work with borrowers, and promised to do so, they have dropped the ball,” said Woolsey.  “The volume of complaints I and my colleagues have received strongly suggests that these are not isolated incidents but a pattern of misconduct. We need to investigate.”

Woolsey said she has been concerned for some time about the foreclosure and mortgage problems in her district.

“That’s why I held two foreclosure prevention seminars recently with the Federal Home Loan Bank,” Woolsey said. “We must do everything we can to help Marin and Sonoma residents through this difficult time.”

Attached below are full text of the letter and case work highlights on the foreclosure crisis from members of the California Democratic Congressional Delegation.