Bair Says Regulators Need More Data to Break Foreclosure Logjam
Nov. 8 (Bloomberg) -- Federal Deposit Insurance Corp. Chairman Sheila Bair said regulators will need to gather more information on mortgage documents to relieve a foreclosure bottleneck that threatens to derail the U.S. economic recovery.
“There is still more important information to be gathered,” Bair said today at a Securities Industry and Financial Markets Association conference in New York. “I do have a concern that the problems will slow down even further the foreclosure process.”
JPMorgan Chase & Co., Bank of America Corp. and Ally Financial Inc.’s GMAC Mortgage unit are among loan servicers that temporarily halted home seizures to review paperwork after court documents showed employees may have submitted affidavits in foreclosure cases without confirming their accuracy.
“This is a serious problem,” Bair said. “I see some serious issues with documentation.”
The Dodd-Frank financial regulation law gave the FDIC new authority to create a mechanism for unwinding failed firms whose collapse might undermine the economy. President Barack Obama, who signed the measure in July, proposed the rules overhaul after the 2008 bankruptcy of Lehman Brothers Holdings Inc. sparked a credit crisis that led to a U.S. bailout for banks.
The financial system is “so much better off” since the enactment of Dodd-Frank, Bair said at the Sifma conference, where she was interviewed by Charlie Rose, executive editor and host of “Charlie Rose,” which airs on PBS and Bloomberg Television. The FDIC is one of several regulators responsible for implementation of the law over the next few years.
Bair, whose five-year term as FDIC chairman expires next year, said she doesn’t want to extend her stay.
“I do not want to be reappointed,” she said. “New blood and fresh thinking is always important for regulators.”
To contact the reporters on this story: Meera Louis in New York at Mlouis1@bloomberg.net Phil Mattingly in New York at email@example.com .
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FDIC's Bair: Higher Bank Capital Will Serve As Buffer
DOW JONES NEWSWIRES
By Jessica Holzer
By Jessica Holzer
NOVEMBER 8, 2010, 2:45 P.M. ET
WASHINGTON (Dow Jones)--Federal Deposit Insurance Corp. Chairman Sheila Bair argued that new tougher capital requirements for banks will serve as a safeguard against arbitrage opportunities created by the new Dodd-Frank financial law.
"We are capital hawks. We will never get regulation completely right and there will always be cycles," Bair said Monday at the Securities Industry and Financial Markets Association annual meeting in New York.
Higher capital levels could serve to absorb losses created from regulatory failures or other future shocks, she said.
Bair said the banking sector is healing, but warned that a foreclosure standstill could prolong the pain to the banking sector.
"The market at some point has to clear. That is just the tragic reality of this," she said.
Bair said she favors efforts to keep people in their homes, but argued that many properties tied up in the foreclosure document mess are vacant and "need to be moved along." In other cases, the borrower is "in too much house" and can't qualify for a modification.
-Jessica Holzer, Dow Jones Newswires; 202-862-9228; email@example.com