1 post tagged “feds”
Mortgage lenders are being urged by the Federal Reserve to figure out improved methods of renegotiating with homeowners at risk of crushing foreclosures.
Just how much the government is going to do to ease the landslide situation with mortgage debacles clear across the country remains to be seen, but the current Fed Chairman Ben Bernanke does seem to be keen to encourage US banks to reduce principals on specific loans.
Speaking before a gathering of community bankers in Orlando, this week, the Fed Chairman was reported to have said that there is a dire need for more to be done than merely relying on early actions of nonprofits and the government combined.
The media reported that Bernanke approximated an 1.5 million adjustable rate and subprime mortgage loans would be resetting to higher rates across the country this year, pushing monthly payments up 10% to an additional $1,500.
According to Bernanke, US Banks should be the next to step up to the plate to preempt this year's wave of foreclosures due to many homeowners being unable to afford this extra monthly payment.
One solution reportedly put forward by Bernake was for banks to renegotiate the value of an actual mortgage so that a borrower would be more likely to be able to afford the payment, as opposed to renegotiating the terms of the initial overinflated loan.
