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Washington
Regulators urge loan mod participation
WASHINGTON (3/5/09)—The National Credit Union Administration (NCUA), along with the federal bank and thrift regulators, encouraged all federally regulated financial institutions to participate in the Obama administration’s newly detailed “Making Homes Affordable” loan modification program. The U.S. Treasury Department’s guidelines implement financial incentives for mortgage lenders to modify existing first mortgages and set standard industry practices for modifications. In its announcement yesterday, Treasury said its loan modification program also includes additional incentives for efforts to extinguish second liens on modified loans. Extinguishing second liens, the department said in its release, will make mortgages more affordable, improve loan performance, and help prevent foreclosures. The NCUA, in a joint statement with federal bank and thrift regulators, said the agencies strongly support the administration’s goal of promoting sustainable loan modifications for at-risk homeowners “that appropriately balance the interests of homeowners, servicers, and investors.” “The program also provides incentives for homeowners whose mortgages are modified to remain current on their mortgages after modification. Taken together, these incentives should help responsible homeowners remain in their homes and avoid foreclosure, thereby easing downward pressures on house prices in many parts of the country and averting the costs to families, communities, and the economy from avoidable foreclosures,” the joint statement said. The federal bank, thrift, and credit union regulatory agencies worked closely with Treasury in developing the guidelines, the statement noted. Use the resource link below to see program details.
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