Congress Concerned By Loss Mit Training.(Special Report)

Washington-Members of the U.S. Congress, prodded by the extent of the foreclosure crisis, have started to pay close attention to the hiring and training of loss mitigation staff.

That's particularly true on the House Financial Services Committee, where chairman Barney Frank, D-Mass., and Rep. Maxine Waters, D-Calif., have been holding hearings to examine loan servicing practices.

Rep. Waters in particular has paid close attention to the servicing industry in recent months, and she said at a recent congressional hearing that she doesn't always like what she sees. She said loan servicing practices were "woefully underregulated" during the housing boom years.

"When the crisis hit, it rapidly became clear that the mortgage servicing 'muscle' of the industry had largely atrophied. Nobody was sufficiently staffed up or trained to do the kind of workouts and modifications needed," Rep. Waters said during the hearing.

While the industry has responded to the need for more staffing and better training in the area of doing modifications and other plans to keep borrowers in their homes, she said the efforts have not been as extensive as they should be. Moreover, she said industry-provided data on loan servicing is "incomplete and somewhat opaque."

At field hearings, Rep. Waters said homeowners, housing counselors, legal aid attorneys and local government officials all say they have trouble getting "prompt, reasonable action by mortgage servicers."

Rep. Waters believes that the current situation calls for federal government intervention. But mortgage servicers and the Hope Now alliance report that they've made significant strides in beefing up loss mitigation staffing and training efforts.