by Moe Bedard
To help those distressed households for which foreclosure can be prevented, servicers must implement effective and sustainable modifications. Key private and public steps toward preventing unnecessary foreclosures have already been taken, but much more must be done. While community bankers typically do not have large portfolios on which to perform wholesale modifications, I would urge you to be sure that you are making reasonable accommodations whenever possible to keep homeowners in their homes.
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by Moe Bedard
The Federal Reserve’s Ben Bernake sent a letter to the Senate Banking Committee announcing a new loan modification program to help keep struggling homeowners in their homes. The program will be applied to whole owned mortgage assets that it aquired in the recent Fed assisted JPMorgan Chase’s purchase of Bear Stearns and support of insurance giant AIG.
The Bear Stearns portfolio is worth approximately $27 billion and it is not clear how much of the $27 billion is tied to residential mortgages. AIG assets include a $20 billion portfolio of mortgage backed securities (MBS) and a $27 billion portfolio that includes securities that are backed by mortgages.
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