As a result of widespread foreclosure fraud by the major banks, who submitted documents to courts that were not verified but were "robo-signed," the banks are expected to sign agreements in the near future that will change foreclosure procedures.

As part of the anticipated agreements, mortgage servicers will be obligated to have more oversight and to provide proper training to their employees who work on foreclosure cases. The oversight obligation will extend to contractors and other third parties who do the actual work of evicting people from their homes.

The new rules will also mean that every homeowner in default will have a single point of contact with the mortgage servicer. Also, servicers will end the much-maligned but commonplace practice of foreclosing while borrowers are pursuing loan modifications that might allow them to stay in their homes.

Fort Lauderdale foreclosure defense lawyers noted that in addition to new rules looking forward, the agreement will require servicers to hire an independent consultant to review foreclosures done over the last two years. Anyone who is found to have been improperly foreclosed on or who has paid excessive fees will be compensated by the mortgage servicers.

State attorneys general are seeking tougher sanctions than federal regulators are. The attorneys general want banks to cut the debt of delinquent homeowners, but the banks are resisting that measure.

Since banks will have to have more training and oversight of their employees, they will either have to hire many more employees, or slow down the foreclosure process drastically.

Any fines to be paid by the banks will be determined in the future.

Source: New York Times "Servicers Said to Agree to Revamped Foreclosures" 4/6/2011