Lenders urged to work with US homeowners facing default
Thursday, 6 September 2007
WASHINGTON, Sept 5 (AFP): The Federal Reserve and other financial regulators urged mortgage holders yesterday to work with homeowners facing default to try to work out terms and help "preserve homeownership."
The statement from the Fed and other regulators comes amid concerns that as many as two million US homeowners may face foreclosure as interest rates are reset on adjustable-rate mortgages.
Companies servicing mortgages, including loans that have been bundled into securities, should try to "identify borrowers at risk of default and pursue appropriate loss mitigation strategies designed to preserve homeownership," the statement said.
"Significant numbers of hybrid adjustable-rate mortgages will reset throughout the remainder of this year and next.
The statement from the Fed and other regulators comes amid concerns that as many as two million US homeowners may face foreclosure as interest rates are reset on adjustable-rate mortgages.
Companies servicing mortgages, including loans that have been bundled into securities, should try to "identify borrowers at risk of default and pursue appropriate loss mitigation strategies designed to preserve homeownership," the statement said.
"Significant numbers of hybrid adjustable-rate mortgages will reset throughout the remainder of this year and next.