Industry News

Lenders endorse subprime principles

Outreach, loan modifications seen as tools to prevent foreclosure

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The Mortgage Bankers Association and several large mortgage lenders have agreed to endorse a set of principles for working with troubled borrowers drawn up by the Senate Banking Committee. The principles include making early contact with holders of adjustable-rate mortgages who face interest-rate resets, and working to modify loan terms where feasible to prevent defaults and foreclosures. The principles are the product of an April 18 Homeownership Preservation Summit convened by Senate Banking Committee Chairman Sen. Chris Dodd, D-Conn. The committee invited consumer and civil rights groups, along with the largest subprime mortgage lenders, to put forward proposals to stem the rise in delinquencies and foreclosures in subprime loans In addition to the Mortgage Bankers Association, lenders endorsing the principles include Citigroup, JPMorgan Chase, Litton Loan Servicing, HSBC, Bear Stearns, Freddie Mac, Fannie Mae and the Self-Help Credit Union. Consumer and civil rights groups endors...