Future regulation of U.S. mortgage servicing in the wake of soaring foreclosures stemming from the credit crisis may increase costs and slow economic recovery, Federal Deposit Insurance Corp. Chairman Sheila Bair said.
Bair, who has fought to include servicing standards in Dodd-Frank Act rules requiring lenders to retain part of the risk when they sell loans to investors, expressed concern about the possible consequences today during a discussion at an FDIC community-banking conference in Washington.
“I can see lots of regulation coming on servicing,” Bair said. “This is going to create more problems doing mortgages and I worry about that. It is more about the economy now.”