The mortgage servicing industry will need to make “substantial” investments to improve the foreclosures process, Federal Reserve Governor Daniel Tarullo said Wednesday. “Fixing the problems in the mortgage servicing industry may also require thinking about some fundamental structural changes to the current mortgage system,” Tarullo said in prepared remarks to Congress.

He also said regulators have found “significant weaknesses” in banks’ mortgage servicing and foreclosure controls. He said regulators are expanding their review into bank’s foreclosure practices.

On Wednesday, the Senate Banking Committee is examining problems in the mortgage servicing industry and will hear from Tarullo, bank regulators and representatives from mortgage finance companies Fannie Mae and Freddie Mac .