MEDIA RELEASE

U.S. Sen. Daniel K. Akaka (D-Hawaii) joined 10 other Senators in introducing the Regulation of Mortgage Servicing Act. The bill is aimed at helping homeowners who are at risk of foreclosure stay in their homes by bringing more fairness and transparency into their dealings with mortgage servicers.

The bill would bring to an end the dual track process, under which a foreclosure process proceeds at the same time that a homeowner is being considered for non-foreclosure alternatives.

In addition, the bill would require banks and other mortgage servicers to create a single point of contact for homeowners to work with and provide an independent, third-party review before sending a family to foreclosure.

“My office has received countless requests for help from local families frustrated by delays, confusion, broken promises, and conflicting advice from their loan servicers. These families are simply trying to find a way to stay in their homes, and the added hardships they have endured are inexcusable,” Akaka said. “This legislation will help families and loan servicers to communicate and work more effectively toward their mutual benefit.”

In 2010, Hawaii ranked 11th in the nation for foreclosures with one of every 45 housing units receiving a foreclosure filing, according to RealtyTrac. There were 12,435 properties with foreclosure filings — including notices of default, public auctions and bank repossessions — in Hawaii last year.

That was a 38 percent increase over 2009 and three-and-a-half times as many filings as in 2008. Nationally, just over 1 million homes were foreclosed on last year.

The Regulation of Mortgage Servicing Act is authored by Sens. Jeff Merkley (D-OR) and Olympia Snowe (R-ME) and was introduced May 12. In addition to Senator Akaka, original co-sponsors include Senators Jack Reed (D-RI), Dick Durbin (D-IL), Daniel Inouye (D-HI), Ron Wyden (D-OR), Bernie Sanders (D-VT), Sheldon Whitehouse (D-RI), Jeanne Shaheen (D-NH), and Richard Blumenthal (D-CT).

The legislation is also supported by the Center for Responsible Lending, the National Consumer Law Center, the Consumer Federation of America, the National Community Reinvestment Coalition, and the National Council of La Raza.