Sheila Blair, the chairperson of the Federal Deposit Insurance Corporation, recently said in an interview with “60 Minutes” that the nation’s largest lenders may soon be forced to set up a fund that would help consumers pay for the cost of foreclosure disputes, according to a report from political news site The Hill. Banks are slated to foreclose on more than a million homes across the country this year, with the affected consumers footing the bill for fighting any actions taken against them.
“I think that this litigation could easily get out of control,” Blair told the news magazine show. “We’re already feeling like we’re falling behind it.”
Blair also estimated that the fund would likely cost lenders billions of dollars, the report said. Currently, both federal and state lawmakers are working with the nation’s major lenders to come to a settlement regarding their improper handling of millions of improper foreclosure actions taken against consumers in recent months.
These improper actions, known as robosigning, occurred when unauthorized bank employees were allowed to sign off on foreclosure actions despite not being qualified to do so and, in many cases, not properly examining the associated documents.