Congress To Investigate Allegations Of Mortgage Company Abuse Of Bankruptcy Court System

The New York Times reports:

• A Senate subcommittee plans a hearing next week to investigate whether mortgage lenders are abusing the bankruptcy court system and deepening the foreclosure crisis by levying dubious fees on troubled borrowers or moving to seize their homes improperly. Senator Charles E. Schumer, chairman of the Senate Judiciary Committee’s Subcommittee on Administrative Oversight and the Courts, said he hoped the hearing on May 6 would lead to legislation intended to protect borrowers from abusive practices. “What the hearing is going to show is what an ongoing, awful enterprise some of these companies ran, not just taking advantage of the terms of the mortgage, but when they control the mortgage how they continue to squeeze and squeeze and squeeze,” Mr. Schumer, Democrat of New York, said.

For more, see Panel to Look at Foreclosure Practices.