Editorial: Stepping Up to the Plate
While the headlines may all talk about rising foreclosures, here at MSN we are impressed by the efforts many loan servicers are making to keep borrowers in their homes.
By way of example, Washington Mutual has committed up to $2 billion in financing to help subprime homeowners avoid foreclosure. Those loans will be made at discounted interest rates. Other lenders have also developed strategies to help refinance troubled subprime borrowers who are facing onerous rate resets. Fannie Mae and Freddie Mac have also indicated that they will design financing to help bail out troubled subprime borrowers. On the servicing side of the equation, the examples of an industry stepping up to the plate to help borrowers are even more numerous. Lenders and legislators are rarely on the same page when it comes to industry oversight, but recently many industry leaders have called upon loan servicers to take whatever remedial steps are available to try to avert foreclosure through refinancing, workouts and forbearance. John Robbins, chairman of the Mortgage Bankers Association, went on record putting the MBA in support of principles for mortgage servicers that were laid out in a homeownership preservation summit hosted by Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee. He said the MBA agrees that lenders need to come to the aid of subprime borrowers who are facing the threat of default and foreclosure as their hybrid ARMs reset. Separately, JPMorgan Chase, which has faced criticism for being the servicer of record in a large number of foreclosures in the Midwest, also came out in support of the principles. The company has already taken proactive steps to assist borrowers who are facing financial difficulty, including the creation of a Homeownership Preservation Office. That office helps train nonprofit counselors, housing advocates and public officials. JPMorgan Chase also has streamlined its loan modification process to make it easier for borrowers to obtain "workable and affordable solutions."
It's a good start for the industry and underscores the role that real estate finance companies play in making America's high rate of homeownership possible. The industry has faced some rough treatment recently, but we are confident that servicers are ready to play a big role in helping troubled borrowers. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com