Lawmakers urge foreclosure delay until Oct 1
WASHINGTON (Reuters) - Members of a congressional housing market oversight panel on Tuesday again urged the mortgage industry to hold off on foreclosures until legislation meant to help distressed U.S. homeowners can take effect on October 1.
The four Democratic members of the House of Representatives Financial Services Committee said they planned to convene a public hearing on September 17 to measure compliance with their request for lenders to demonstrate forbearance.
The landmark legislation, signed into law last month, was expected to help at least 400,000 troubled borrowers refinance out of costly, exotic mortgages into more affordable, government-backed home loans.
The forbearance request was made by committee Chairman Barney Frank of Massachusetts, and members Maxine Waters of California, and Mel Watt and Brad Miller, of North Carolina.
The four signed a letter that was sent to the chief executives of major financial institutions, including HSBC Finance, JPMorgan Chase & Co, Fannie Mae, Freddie Mac, Wells Fargo & Co and financial industry lobbying groups.
"We are calling upon servicers to forbear foreclosures for potentially eligible homeowners over the next few months, review their loan documents and prepare to refinance eligible borrowers by October 1," the lawmakers wrote.
They also asked lenders for information on their mortgage servicing practices.
On July 25, Frank asked banks to suspend further foreclosures until the new mortgage refinancing program could get going.
The legislation enacted last month also offered emergency financing, if needed, for housing finance companies Fannie Mae and Freddie Mac as part of a sweeping effort to address the biggest housing slump since the Great Depression.
(Reporting by Kevin Drawbaugh; Editing by Jonathan Oatis)
