WASHINGTON The top Democrat on a House oversight panel is calling on his Republican counterpart to subpoena copies of certain contracts used by mortgage servicing companies that might provide insight into past foreclosure abuses.
Representative Elijah Cummings of Maryland, the top Democrat on the House Government Oversight Committee, wants to use the panel's power to pressure federal regulators to disclose so-called engagement letters. The engagement letters from the 14 largest mortgage-servicing companies governed the contracts they had with consultants hired to review foreclosure actions.
"It is incumbent on our committee to ensure that appropriate oversight and remediation actions are taking place," Cummings wrote in a letter to the panel's chairman, Representative Darrell Issa, a California Republican.
Federal regulators began scrutinizing mortgage servicers last year after widespread problems were found with foreclosure practices. The practices, known collectively as "robo-signing," resulted in a suspension of foreclosures and a probe by all 50 state attorneys general and the Justice Department.
As a result, mortgage servicers were required by federal regulators to conduct reviews of foreclosure practices. Servicers hired private consultants to oversee the reviews and determine what caused the problems.
Cummings is seeking help from Issa because he failed to obtain the mortgage servicers' contracts from federal regulators on his own a few months ago. The agencies said they did not have legal reason to release the documents.
In his letter, Cummings said he was concerned the consultants performing foreclosure reviews had set their own terms, which might have resulted in conflicts of interest.
"We cannot fulfill our duty without reviewing the full, unredacted engagement letters concluded between mortgage servicing companies and the firms they engaged to review their foreclosure actions," he wrote.
Cummings has been pressuring federal regulators to do more to dampen the pace of foreclosures and revive the housing market.
(Reporting by Margaret Chadbourn, Editing by Chizu Nomiyama)