FDIC's Bair calls for foreclosure claims commission

WASHINGTON Jan 19 (Reuters) - The mortgage servicing industry should fund a new commission to compensate homeowners who have been kicked out of their homes because of errors made by servicers, a top U.S. banking regulator said on Wednesday.

Federal Deposit Insurance Corp Chairman Sheila Bair said this claims commission could be modeled on those created to compensate victims of the BP oil spill and Sept. 11, 2001 terrorist attacks.

In a speech outlining proposals for broad reforms to the mortgage servicing industry, Bair said she expects the industry to oppose such a commission but argued that this reluctance would be shortsighted.

"Every time servicers have delayed needed changes to minimize their short-term costs, they have seen a deepening of the crisis that has cost them - and the rest of us - even more," Bair said at an event hosted by the Mortgage Bankers Association.

Regulators, lawmakers and consumer groups have been calling for new mortgage servicing standards after banks were accused late last year of taking possibly illegal shortcuts in some foreclosure proceedings, such as using "robo-signers" to sign hundreds of unread documents a day.

In response, federal regulators and all 50 state attorneys general are investigating banks' mortgage servicing practices. Bank of America (BAC.N), Wells Fargo (WFC.N) and JPMorgan Chase & Co (JPM.N) are among the largest U.S. mortgage servicers. (Reporting by Dave Clarke, Editing by Derek Caney)