bobbyw24
03-12-2010, 10:05 AM
House Financial Services Committee Chairman Barney Frank (D-Massachusetts) is calling for junior lien holders to take a loss on secondary mortgage debt, such as home equity loans, which he says have “no real economic value” considering the state of the housing market.
Frank sent a letter to the CEOs of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo last week demanding they “take “immediate steps to write down second mortgages,” which servicers say are preventing them from providing sustainable loan modifications for troubled borrowers. And an influential group of mortgage investors are throwing their full support behind Frank’s call to action.
The Mortgage Investors Coalition (MIC) represents holders of some $100 billion in mortgage securities, including insurers, asset managers, and hedge funds. The group has been pushing for principal write-downs for about a year now. Last month, the investors made their pitch to Chairman Frank for reducing mortgage principals to allow underwater borrowers to refinance into new government-backed loans, and this week MIC issued a follow-up statement in favor of Frank’s proposal.
Based on their fourth quarter 2009 filings with the Securities and Exchange Commission (SEC), the four banks in question collectively own more than $400 billion of the nation’s $1 trillion second lien mortgage market. BofA holds $149 billion in junior liens, Citi has $54 billion, JPMorgan $101 billion, and Wells Fargo $115 billion.
read more
http://www.dsnews.com/articles/mortgage-investors-back-franks-push-for-second-lien-write-downs-2010-03-11
Frank sent a letter to the CEOs of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo last week demanding they “take “immediate steps to write down second mortgages,” which servicers say are preventing them from providing sustainable loan modifications for troubled borrowers. And an influential group of mortgage investors are throwing their full support behind Frank’s call to action.
The Mortgage Investors Coalition (MIC) represents holders of some $100 billion in mortgage securities, including insurers, asset managers, and hedge funds. The group has been pushing for principal write-downs for about a year now. Last month, the investors made their pitch to Chairman Frank for reducing mortgage principals to allow underwater borrowers to refinance into new government-backed loans, and this week MIC issued a follow-up statement in favor of Frank’s proposal.
Based on their fourth quarter 2009 filings with the Securities and Exchange Commission (SEC), the four banks in question collectively own more than $400 billion of the nation’s $1 trillion second lien mortgage market. BofA holds $149 billion in junior liens, Citi has $54 billion, JPMorgan $101 billion, and Wells Fargo $115 billion.
read more
http://www.dsnews.com/articles/mortgage-investors-back-franks-push-for-second-lien-write-downs-2010-03-11