Over the next few weeks, the Federal Housing Administration (FHA) will send review teams into several FHA servicing shops to see how they are handling foreclosures, ASR sister publication National Mortgage News (NMN) has learned.
"We want to understand what processes are in place," FHA commissioner David Stevens said in an interview with NMN.
Allegations concerning "robo-signings" and other improper foreclosure practices have become a national issue for the mortgage industry, prompting the Obama Administration to take action.
"We have zero tolerance for any servicer that tries to cut corners or break the law," the FHA commissioner said.
FHA servicing teams have recently reviewed the loss mitigation practices and operations at several mortgage firms, the agency confirmed, without identifying the companies.
"To protect the FHA portfolio, we are going back to look specifically at how they handle the foreclosure process," Stevens said.
In other foreclosure news, Bank of America said it has reviewed its foreclosure procedures in 23 judicial states, resubmitted affidavits that were in dispute, and anticipates cranking up REO sales in a few weeks.
The bank estimated that less 30,000 foreclosure sales were scuttled by its temporary moratorium.
BofA said that on Monday it "began the process of preparing foreclosure affidavits for submission in 102,000 foreclosure actions in which judgment is pending."
It added that: "We anticipate that by Monday, Oct. 25, the first foreclosure affidavits will be resubmitted to the courts. Upon judgment, foreclosure dates will be set and Bank of America will resume foreclosure sales in such proceedings in the 23 judicial states."
The bank noted that it will continue to delay foreclosure sales on a "state by state basis" in the remaining 27 states until its reviews are completed.
BofA ranks first among all residential servicers with $2.197 trillion in receivables and a market share of 22.21%.