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Servicers Concede Several Points in Settlement Response

Servicers made several concessions in their version of the settlement proposal that they submitted to federal and state regulators on Tuesday.

In an excerpt of the draft, obtained by _DS News_, servicers agree to stop ""dual tracking,"" or proceeding with a foreclosure while a borrower is under review for or in the process of completing a loan modification.


They promise to automatically review any loan modification that has been denied and to implement processes to notify a borrower that he has 10 days to appeal a denied modification.

Perhaps most significant in the excerpt is a pledge by the servicers to establish standards for affidavits and sworn statements in foreclosure and bankruptcy proceedings. The ""robo-signing"" scandal is what prompted attorneys general and several federal agencies to draft a settlement for servicers.

The document says, ""Servicer[s] shall implement processes reasonably designed to ensure that factual assertions made in pleadings, declarations, affidavits, or other sworn statements filed by or on behalf of the servicer are accurate and complete.""

The proposal also states that the servicers will not adopt compensation arrangements for its employees that would encourage a foreclosure over loss mitigation alternatives, and that servicers will provide a single point of contact for borrowers throughout the loss mitigation process, short sale process, or forbearance process.

About Author: Joy Leopold


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