More Pressure for Loan Mods

Ten state attorneys generals and banking commissioners are pressuring 16 subprime servicers to adopt more systematic loan modification programs following their "breakthrough" settlement agreement with Bank of America to modify 390,000 Countrywide subprime and payment-option mortgages. "We urge you in the strongest possible terms to adopt a comprehensive, streamlined and effective loan modification program as soon as possible," the state officials say in a letter that was sent to the servicers on Oct. 7. These officials are part of a State Foreclosure Prevention Working Group that began meeting with major servicers last summer to encourage and monitor their mortgage workout efforts. In a September report, the working group concluded that servicers' foreclosure prevention efforts had "slipped" since April and "nearly 8 out of 10 seriously delinquent homeowners are not on track for any loss mitigation outcome." A spokesman for Iowa AG Tom Miller noted the working group wants to work with the servicers in adopting a more efficient response to the foreclosure crisis. "Later on, if it is necessary, we would consider litigation," he said.