Elizabeth Warren: Affidavit Problem Is ‘Big And Serious’

Written by John Clapp
on October 12, 2010 No Comments
Categories : Mortgage Servicing

The federal government's role in the ongoing foreclosure affidavit debacle, at this point in time, is to gather information, Elizabeth Warren said today. Speaking on a live chat hosted by WhiteHouse.gov, Warren used reports of servicers' flawed paperwork as proof that the U.S. needs the Consumer Financial Protection Bureau.

Last month, President Obama tapped Warren to get the bureau off the ground. Had a similar agency been in place three years ago, the problems confronting servicers today could have been avoided, Warren said.

‘Little problems are a lot easier to fix than great big problems,’ Warren told viewers online.

She additionally stated that major servicers' voluntary foreclosure freezes mean two things. First, this problem ‘is big, and it is serious,’ and second, the voluntary moratoria represent evidence that ‘the issuers themselves are trying to get this problem solved,’ she said.

Although numerous Democratic lawmakers have called for a national moratorium on foreclosures, the White House has been more temperate in its response. White House senior adviser David Axelrod on Sunday called the mortgage document mistakes ‘a serious problem’ but added, ‘There are, in fact, valid foreclosures that probably should go forward.’

White House spokesperson Robert Gibbs warned Tuesday of the unintended consequences that accompany a broader foreclosure moratorium.

‘We want to take the just and necessary steps to ensure that the process is being followed legally,’ Gibbs told reporters, according to Reuters. ‘At the same time, we don't want to see broader harm done to the housing market and to the housing recovery.’

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