FHA's Stevens: Mortgage servicers are falling short of HUD expectations

This is just a small part of the continuing foreclosure-gate problem.

Stevens said when he first entered office in 2008 significant reviews into servicers were not being done. So, in May, the FHA launched a review of several of its largest servicers that, combined, accounted for over 70% of HUD's single-family servicing portfolio.

"The early returns suggest that some servicers may be falling short – that in varying degrees many of the servicers under review may not have met HUD’s expectations in assisting borrowers through the loss mitigation process," Stevens said.

He added that FHA analysts have found some servicers even lack knowledge of the FHA loss mitigation process, necessary technology and enough experienced staff necessary to clear modification request backlogs.

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