Magazine article American Banker

Subprime Foreclosure in Spotlight

Magazine article American Banker

Subprime Foreclosure in Spotlight

Article excerpt

Washington -- Lawmakers And Regulators Will Be Scouring For Solutions This Week To The Growing Number Of Subprime Foreclosures In Several Events Planned On And Around Capitol Hill.

Today the House Financial Services Committee is hosting its first full- committee hearing on the topic.

Lawmakers are expected to ask Federal Deposit Insurance Corp. Chairman Sheila Bair for a debriefing on a roundtable the agency hosted Monday with Wall Street firms, lenders, servicers, and other participants in securitizing subprime mortgages.

On Monday, Ms. Bair called on stakeholders in the mortgage securitization process to be more accommodating to subprime borrowers who want to convert into fixed-rate loans.

"The securitization process has complicated the ability of servicers to modify loans for borrowers that are currently in credit distress," Ms. Bair in an interview on CNBC Monday morning, shortly before the FDIC's summit was to begin.

Ms. Bair said the summit would be "quite a show," with participants to include rating agencies, credit enhancers, tax lawyers, and accountants. (The summit was closed to the press.)

In the wake of the subprime meltdown, FDIC officials and others have argued that lenders should consider switching distressed borrowers into loans with fixed rates. Ms. Bair said on CNBC that investors may find the losses incurred in switching from an adjustable-rate mortgage to a fixed-rate loan preferable to taking a hit of up to 40% as a result of a foreclosure. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.