Principle Reduction Maybe Coming Soon!
diyloanmodkit
A 27-page proposal was received by U.S. banks last Thursday from state attorneys general and several federal agencies that could require them to reduce loan balances of troubled mortgage borrowers.
The proposal details a code of conduct for banks on how they should treat borrowers going through a loan modification of foreclosure.
The proposal represents the clearest indication that the 50 state attorneys general are working hand-in-hand with the Obama administration and other regulators to pursue a significantly broader settlement against the banks than any of the federal agencies might be able to win by themselves.
The proposal outlines formulas that would force banks to consider offering loan write-downs to troubled borrowers more regularly during the modification process. Banks have resisted reducing loan balances in part because of concerns that it could encourage more borrowers to stop making payments in order to receive smaller loan.
In the next few weeks, State and federal officials plan to begin meeting with banks to negotiate a final agreement on the code of conduct.
Let’s see how this works out.
