Consumer advocates and bank executives clashed Thursday over the financial industry’s handling and the severity of the so-called robo-signing crisis that the government says could derail the housing market.
The Federal Reserve Consumer Advisory council meeting convened as the White House and bank regulators have begun to expand their efforts to fight foreclosure fraud after some large institutions admitted they had used the tactic of “robo-signing,” where institutions assign one person to quickly approve numerous foreclosures with only cursory glances at the paperwork to determine whether all the documents are in order.
The Obama administration nonetheless has resisted calls for a national foreclosure moratorium as some lenders have re-started efforts to seize homes. It said a moratorium would threaten a fragile recovery.
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