Gov't probes foreclosure problems
A gate to a foreclosed home is locked with a chain and padlock April 15, 2010 in Richmond, Calif.
TEXT OF INTERVIEW
JEREMY HOBSON: We'll go now to the housing market here in the U.S. There's a report today of a government probe into problems with foreclosures across the banking system. Marketplace's Mitchell Hartman is with us live with more on this story.
Good morning, Mitchell.
MITCHELL HARTMAN: Good morning, Jeremy.
HOBSON: So, where do we stand with foreclosuregate -- the probes into mortgage servicers cutting corners to seize homes from defaulting homeowners?
HARTMAN: Well, a bunch of agencies are looking into so-called "robo-signers." These are inexperienced bank employees who processed foreclosures allegedly without knowing what was in them. There are investigations by the SEC, the regulator for Fannie and Freddie, as well as HUD, that's Housing and Urban Development.
HOBSON: And what are all those investigations finding, Mitchell?
HARTMAN: HUD Secretary Shaun Donovan told the Wall Street Journal there's a spotty record among banks in terms of not just their foreclosure procedures, but also how they handle mortgage documents in general. Now, this is important because those mortgages were sliced and diced into mortgage-backed securities. So there's some concern about a ripple effect if those mortgages aren't where they should be-if the loan portfolios are a mess.
HOBSON: Alright. Marketplace's Mitchell Hartman, thank you so much.
HARTMAN: You're welcome.