Lender Collection Efforts Rapped in Louisiana

Louisiana regulators are receiving a significant number of complaints from homeowners that private lenders are demanding payments that were suspended for three months because of Hurricane Katrina."They are now receiving demand for up to four months at once to bring the mortgage current or otherwise face possible foreclosure," according to the Louisiana Office of Financial Institutions. While Fannie Mae, Freddie Mac, and the Federal Housing Administration have extended forbearance, "the state cannot force private lenders to do the same," an OFI spokesman said. Rep. Richard Baker, R-La., warned that thousands of homeowners could receive payment notices from banks and face possible foreclosure if Congress does not act in the next few weeks to provide mortgage relief. The House and the Senate are expected to take up a Katrina-Rita recovery measure soon that will include funding to help with the rebuilding of homes that were damaged or destroyed in the hurricanes.