Bair Wants Foreclosure Claims Commission

One of the nation's top banking regulators is proposing a BP-style commission to pay settlements to homeowners who have been hurt by the foreclosure mess.

“We need to provide remedies for borrowers harmed by past practices,” Sheila Bair, chairman of the Federal Deposit Insurance Corporation, said Wednesday. “A foreclosure claims commission, modeled on the BP (NYSE: BP) or 9/11 claims commissions, could be set up and funded by servicers to address complaints of homeowners that have wrongly suffered foreclosure through servicer errors.”

Bair's proposal was among a number of recommendations she made in a speech to mortgage bankers in Washington. Her remarks centered on fixing mortgage servicing.

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