- Senator Charles Schumer sent a letter to the large accounting firms, asking them to educate lenders about the newly understood flexibility of FAS 140 in regards to the loan modification issues and concerns lenders and servicers have expressed to the SEC. This was just one month after Securities and Exchange Commission chairman Christopher Cox made the announcement more economically feasible for lenders to modify securitized loans when a default seems likely.
You can read the full CFO. com article here.
As of yet there has been no response but I feel this action by Sen. Schumer is a great start to light a fire under these accounting firms, lenders and servicers you know what, so they can start helping troubled borrowers everywhere.
“However, prompted by queries from congressmen concerned about the burgeoning subprime mortgage meltdown earlier this year, Cox implied that the lenders could indeed make modifications without a change to their balance sheet — as long as the likelihood of default is “reasonably foreseeable.” Cox’s letter said that “modifications undertaken when loan default is reasonably foreseeable should be consistent with the nature of modification activities that would have been permitted if a default had occurred.”
Like I mentioned before, my mission is to promote loan workouts and loan modifications as the only viable solution to this crisis that we are in now. We need more action and pressure from congress in order for these lenders and servicers to fix these “bad loans” and to hold them accountable to offer “safe” and “affordable” solutions to troubled borrowers.
