Senate Banking Committee Chairman Tim Johnson (D-SD) today hosted Jack Hopkins, CEO of CorTrust Bank, as a witness at today’s Banking Committee hearing on mortgage servicing. Beginning in September of last year, reports of problems in mortgage servicing – including shoddy paperwork, “robosigning,” excessive fees and foreclosures – have focused national attention on the mortgage servicing industry.
“I appreciate Jack coming to Washington and sharing so many valuable insights,” said Johnson. “We can learn a lot from community bankers like Jack who used good judgment and made prudent loans. Our community banks and credit unions were not responsible for the crisis, and I am working hard to make sure they are not unfairly targeted by new reforms to the housing finance system.”
Jack Hopkins is president and CEO of CorTrust Bank, N.A., a $615 million family-owned, South Dakota-based, independent community bank with 25 locations in 17 communities in South Dakota and Minnesota.
Today’s hearing explored the need for rules of the road so that borrowers, investors and servicers have a clear understanding of the process to follow both when a borrower is current on payments and also in the unfortunate event that a borrower becomes delinquent.
In his testimony, Mr. Hopkins noted that community banks have not been involved in the widespread mortgage servicing problems, and that they largely escaped the fallout of the financial crisis by avoiding risky financial products such as Option-ARM mortgages. He also noted that responsible underwriting practices have led to dramatically lower delinquency rates among loans originated by community banks, as compared to the national average.
(Note: Hi-res photos available on request)