The Senate Judiciary Committee’s Subcommittee on Administrative Oversight, chaired by Sen. Charles E. Schumer, plans to hold a hearing next week on alleged abuses by mortgage lenders who are charging improper fees to troubled borrowers or attempting to foreclose on homes improperly. “What the hearing is giong to show is what an ongoing, awful enterprise some of these companies ran, not just taking advantage of the terms of the mortgage, but when they control the mortgage, how they continue to squeeze and squeeze and squeeze”, Mr. Shumer said.
The mortgage crisis has led to a profitable, cottage industry, led by law firms, loan servicers and foreclosure management companies, who charge various fees to borrowers and prepare documents removing borrowers from their homes. This practice has led to increased concern by a unit of the Department of Justice who believe that lenders may be running over borrowers improperly. Sen. Schumer’s subcommittee intends to interview representatives of the office of the United States Bankruptcy Trustee and a law school professor who has authored a comprehensive study about lenders’ practices in bankruptcy. Representatives of the mortgage industry have been invited to testify, but it is uncertain whether the invitation will be accepted.