Lenders Want Clarification of 'Imminent Default'

The industry is looking for a more specific definition of "imminent default" in conjunction with its use in qualifying borrowers for new Treasury-directed agency refinancing and modification programs, according to panelists at the Mortgage Bankers Association's National Secondary Market Conference. Companies refinancing or modifying loans through the programs are concerned about whether they might be liable if the mortgages are found to not have met the definition, said Susanna Konracki, senior vice president of valuation and advisory services at RiskSpan Inc. They also fear exposure to other legal liabilities if they choose not use the programs. As a result, several industry groups including the MBA have been working with the agencies to develop a consensus definition for the term, Ms. Konracki told this publication.