美财政部对贷款人施压

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Treasury Plans to Press Lenders
By DAMIAN PALETTA
May 6, 2008; Page A4

WASHINGTON -- The Treasury Department, in an effort to make its main program for helping home borrowers hit by the subprime mess more effective, plans to step up pressure on mortgage companies.

Officials have called a six-hour meeting Tuesday with banking officials to discuss adopting a uniform, but voluntary, set of criteria to speed the time it takes qualified borrowers to modify mortgages they can't afford. Officials also want to make the modification process more consistent across institutions.

About 10 lenders will attend, including Countrywide Financial Corp., Bank of America Corp., Citigroup Inc. and J.P. Morgan Chase & Co. Officials from mortgage-finance giants Fannie Mae and Freddie Mac will attend part of the meeting.

The industry-led program, called Hope Now and unveiled months ago, remains under fire from Democrats and other policy makers who complain it isn't working fast enough to help homeowners at risk of foreclosure. Lenders reworked 502,500 loans through Hope Now in the first three months of the year, according to industry data. Of those, the terms were modified on 179,500.

Almost 400,000 homeowners started the foreclosure process during the fourth quarter, according to the Mortgage Bankers Association, and many more borrowers remain at risk.

The meeting comes two weeks after Treasury Secretary Henry Paulson met privately with lenders and mortgage counselors to discuss ways to speed the process of helping qualified borrowers.

The new industry guidelines, if adopted, wouldn't be binding and couldn't be enforced by the government. But, if effective, they could help forestall aggressive action from congressional Democrats, who have lashed out at loan servicers for acting too slowly and threatened to push tougher oversight of the banking industry if results don't improve.

The House of Representatives could vote on a bill this week that would allow the Federal Housing Administration to insure as much as $300 billion in refinanced mortgages after lenders had partially reduced the amount of principal owed.

Federal Reserve Chairman Ben Bernanke took a subtle step toward endorsing that proposal Monday when he suggested that in some cases "the best solution may be a write-down of principal or other permanent modification of the loan by the servicer, perhaps combined with a refinancing by the Federal Housing Administration or another lender."

One possible industry "best practice" would have lenders acknowledge the receipt of any request for a modification within five days of a request by homeowners. Some struggling homeowners have complained that it takes two months or longer to hear back from lenders. Also, the companies are considering a policy that would direct lenders to notify borrowers of a decision about whether to modify a loan within five days.

Another tricky issue slowing loan modifications has been the conflict between companies that hold the first and second mortgage on the same home. Treasury officials are also trying to broker a truce between these groups that would make it easier for borrowers with two mortgages on one home to modify the terms of their loans.
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The State Foreclosure Prevention Working Group, a group of banking regulators and attorneys general in 11 states, published a study last month that said seven out of 10 borrowers who were seriously delinquent in their mortgages weren't being helped with their loans.

Loan servicers are also looking for clarification about the role of Fannie Mae and Freddie Mac. The two government-chartered mortgage companies made it easier for lenders to modify the terms of certain qualified loans, such as the interest rate. But they have been stricter about writing down mortgage principals, saying they will generally do so only on a case-by-case basis.

In a speech to the Mortgage Bankers Association in Boston, House Financial Services Committee Chairman Barney Frank (D., Mass.) warned Monday that if the industry doesn't do more to avert foreclosures, "you're going to see a much tougher set of rules" on mortgage lending emerge from Congress later. He said such changes would be "politically irresistible" if foreclosure problems continue to build up.

A Treasury spokeswoman declined to comment.