Bank regulators urge help for borrowers

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News item: The Federal Reserve, joined by state and federal banking regulators, today urged mortgage servicing companies to do what they can to help troubled borrowers avoid foreclosure. A few links:

From the statement itself: ‘Appropriate loss mitigation strategies may include, for example, loan modifications, conversion of an adjustable rate mortgage into a fixed rate, deferral of payments, or extending amortization. In addition, institutions should consider referring appropriate borrowers to qualified homeownership counseling services that may be able to work with all parties to avoid unnecessary foreclosures.’

Inman News: ‘In a statement issued today, federal banking regulators and the Conference of State Bank Supervisors said that where allowed, loan servicers should pursue options including loan modifications, conversion of adjustable-rate mortgages into fixed-rate loans, deferral of payments, or extended amortization.’

The AP: ‘The guidance was aimed at addressing the problem that in many cases the company in charge of collecting monthly mortgage payments is not the same company that originated the loan.’

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