Issa wants more evidence before granting servicer subpoenas

Rep. Darrell Issa (R-Calif.) asked Rep. Elijah Cummings (D-Md.) last week to present “a clear case” before he issues a subpoena to mortgage servicers under investigation for possible mishandled foreclosures. Cummings, a ranking member of the House Committee on Oversight and Government Reform, opened his investigation in February. In May, he sent a letter to Issa, chairman of the committee, formerly requesting to subpoena servicers that refused his requests for information. Bank of America (BAC), Wells Fargo (WFC), U.S. Bank (USB), SunTrust Bank (STI) and PHH Mortgage (PHH) refused to comply. MetLife (MET) said it would send him more documentation — but only under subpoena. In a meeting between the two staffs June 6, Issa said he needed to see more evidence that the banks were ignoring Cummings and a subpoena was the only way to get the information. “In this case, Ranking Member Cummings has not prepared any persuasive report or memo outlining the evidence of the necessity for a subpoena,” an Issa spokesman told HousingWire. According to Issa’s office, when Bank of America heard of Cummings’ letter, the bank contacted both staffs and insisted they did not receive a request from Cummings. The spokesman said both Issa and Cummings are still in discussions but a decision will only be made “once the facts are clear,” the spokesman said. “We responded to the original letter to Rep. Cummings and we continue to work with his office on these issues,” a BofA spokesperson told HousingWire. These and other servicers signed consent orders with federal regulators over foreclosure issues, and continue to negotiate terms from another investigation from the 50 state attorneys general. The Treasury Department will withhold Home Affordable Modification Program funding from BofA, JPMorgan Chase (JPM) and Wells until the three companies make improvements. And Fitch Ratings downgraded mortgage servicer ratings on nine of the largest mortgage servicers on Friday. Write to Jon Prior. Follow him on Twitter @JonAPrior.