FHFA Working on Servicer 'Standards' for Loan Mods

The Federal Housing Finance Agency this week will release "standards" for Fannie Mae and Freddie Mac servicers engaging in loan modifications, agency chief James Lockhart said Monday. Speaking at the Office of Thrift Supervision forum on housing, Mr. Lockhart said he wants servicers to begin thinking about how they can modify loans that are in private label securities. He provided no details. Meanwhile, Federal Deposit Insurance Corp. chairwoman Sheila Bair defended the concept of government involvement in loan modifications after a new study by the Comptroller of the Currency found that in some cases half of all modified loans wind up delinquent again just months after being restructured (see related item below). Ms. Bair said the OCC study offers no "granular" detail on borrowers going delinquent after having their loans modified. She said the OCC study offers no information on debt-to-income ratios, borrower income and other metrics.