More on Rocket Docket Scam

I blogged about the "rocket docket" foreclosure courts in Florida. There is good indication that the David J. Stern law firm forged foreclosure documents. Judges in Florida foreclosure courts have been known not to review foreclosure documentation before evicting a homeowner. The problem became public thanks to Matt Taibbi's reporting in Rolling Stone.

Apparently, the problem has garnered the attention of the Treasury Department. Phyllis Caldwell, Chief of Homeownership Preservation Office, testified before the Senate Finance Committee.

The reports of "robo-signing", faulty documentation and other improper foreclosure practices by mortgage servicers are unacceptable. If servicers have failed to comply with the law, they should be held accountable. The Administration is leading a coordinated interagency effort to investigate misconduct, protect homeowners and mitigate any long-term effects on the housing market. While Treasury does not have the authority to regulate the foreclosure practices of financial institutions, nor to ensure that those practices conform to the law, it is working closely with agencies that do have such authority.

The Financial Fraud Enforcement Task Force, a broad coalition of law enforcement, investigatory, and regulatory agencies that brings together more than 20 federal agencies, 94 U.S. Attorneys Offices, and dozens of state and local partners, is working to ensure that foreclosure practices are thoroughly investigated and any criminal behavior is prosecuted. The Federal Housing Administration (FHA) has been reviewing servicers of loans it insures for compliance with loss mitigation requirements. Additionally, the Office of the Comptroller of the Currency has directed all large national bank servicers to review their foreclosure management processes – including file reviews, affidavit processing, and signatures – to ensure that the processes are fully compliant with all applicable state laws. The other independent banking regulatory agencies are doing similar reviews of institutions under their jurisdiction. Attached to my testimony is a fact sheet providing more detail concerning the activities of the coordinated interagency effort.

I hope Caldwell cracks down on these bogus foreclosures. We could be talking about millions who were thrown out of their homes because of shady legal practices.