WASHINGTON (Legal Newsline) - Alabama Attorney General Luther Strange said Thursday that he fears a settlement with the nation's top mortgage servicers could lead to too many regulations and slow the housing market's recovery.
Strange, a Republican, was among those who testified before the House Financial Services Committee on mortgage servicing. The attorney general was reportedly invited by U.S. Rep. Spencer Bachus, R-Alabama, who is chairman of the House committee.
The committee, which oversees the federal regulation of the industry, held a joint hearing Thursday morning on financial institutions, consumer credit oversight and investigations.
According to the Birmingham News, Strange told lawmakers he supported current negotiations by state attorneys general. He agreed the mortgage servicers should be punished.
But he said he didn't want a settlement that would violate states' rights.
"I am concerned that what started out as an effort to correct specific practices harmful to consumers has evolved into an attempt to establish an overarching regulatory scheme that fundamentally restructures the mortgage loan industry in the United States -- an effort which is well beyond the scope of responsibility of attorneys general," Strange said, according to the Birmingham newspaper.
The attorneys general, U.S. Justice Department, Treasury Department and Consumer Financial Protection Bureau are in the midst of negotiating a settlement with the country's five largest mortgage servicers, including Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co., and Ally Financial Inc.
The mortgage foreclosure probe began in October with inquiries into so-called "robosigning" practices by several mortgage companies, and has since broadened into identifying and addressing additional alleged improper foreclosure practices.
Others who testified Thursday included: Julie Williams, first senior deputy comptroller and chief counsel, Office of the Comptroller of the Currency; Mark Pearce, director, Division of Depositor and Consumer Protection, Federal Deposit Insurance Corporation; Raj Date, associate director of research, markets and regulations, Consumer Financial Protection Bureau, U.S. Department of the Treasury; David Stevens, president, Mortgage Bankers Association; and Michael Calhoun, president, Center for Responsible Lending.
From Legal Newsline: Reach Jessica Karmasek by e-mail at email@example.com.
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