Zandi: Deeper Foreclosure Discounts Needed

Moody's chief economist Mark Zandi says that Troubled Asset Relief program funds should be used to "fund an aggressive foreclosure relief program." During a telephone press briefing with Senators Charles Schumer, D., N.Y., and Jack Reed, D., R.I., to press for passage of an economic stimulus bill, Mr. Zandi said that "mortgage writedowns" are needed to lower the re-default rate on loans that are modified to help borrowers stay in their homes. Also during the call, Sen. Schumer said that legislation to allow bankruptcy courts to modify loan terms would put pressure on bondholders who may be resisting the efforts of mortgage servicers to modify problem loans. Sen. Schumer also said he is confident that Democrats will get the 60 votes needed to avoid a filibuster against the stimulus legislation.