WASHINGTON (Reuters) - U.S. consumer financial protection chief Elizabeth Warren said on Tuesday that a massive settlement of mortgage foreclosure abuses should focus on healing a deeply troubled U.S. housing market, not punishing lenders.
“I don’t think this is about a pound of flesh. I think that’s the wrong way to think about it,” Warren told the Reuters Future Face of Finance Summit.
“I think the best way to think about this is how we put the problems in the rearview mirror, and we say we’ve done it. And now what we’re about is repairing a market going forward. Nothing more and nothing less.”
Warren, who is working to launch the new Consumer Financial Protection Bureau, said that healing was needed in the U.S. housing market, just as there has been healing in the stock market and in the financial services industry generally.
“Right now, among those three, it’s clearly the housing market that’s in the worst shape, and really not yet back on firm footing and ready to build a market going forward,” she said.
U.S. regulators and a coalition of state attorneys general are negotiating a settlement with the biggest mortgage lenders, including Bank of America (BAC.N), JPMorgan Chase (JPM.N) and Wells Fargo (WFC.N). These banks and other mortgage servicing firms have been accused of foreclosing on borrowers without having the necessary paperwork in place.
Warren declined to discuss the settlement negotiations and did not comment on specific components of her preferred structure for the settlement.
Reporting by David Lawder; Editing by Phil Berlowitz