MBA Likes Obama Plan but Thinks More Money May Be Needed

The Mortgage Bankers Association generally likes President Barack Obama's foreclosure plan but questions if $75 billion over three years will be enough to solve the problem. Josh Denney, associate vice president, public policy and government affairs, said MBA thinks the plan will "enhance servicers' ability to help borrowers in trouble and those who may be on the edge of trouble." Mr. Denney, who spoke to MortgageWire at MBA's annual servicing conference in Tampa, said the group was pleased that the $75 billion price tag was greater than the $50 billion figure that had been previously reported but said "it's unclear if $75 billion will be enough." He said the group is pleased with incentive payments to servicers in the plan and thinks a buy-down provision between lenders and the government to reduce debt-to-income levels to 31% is "a good structure." MBA would prefer to see incentives to Freddie Mac and Fannie Mae to make refinancings easier to go higher than 105% loan-to-value to "open it up to those a bit more underwater." The group remains opposed to judicial cramdowns other than to certain subprime mortgages of certain vintages, and Denney said the plan "doesn't seem to address mortgages in private-label securities." MBA would like to see a refi plan to assist those people who can't get loan mods because of legal provisions complicating access to a modification.