Washington, DC, April 5, 2007--John M. Robbins, CMB, Chairman of the Mortgage Bankers Association (MBA) today responded to a call from a variety of civil rights and consumer advocacy groups for an immediate six month moratorium on foreclosures resulting from subprime loans.
Robbins issued the following statement.
“Nobody wins when a home goes into foreclosure. Consumers lose their homes and suffer a ding on their credit rating, and lenders and investors lose significant amounts of money. The industry wants to take every possible step to avoid foreclosure which is why we have developed a number of loss mitigation tools in order to help those who are at risk of losing their homes. Lenders are already using a number of tools to help financially-stretched borrowers stay in their homes, including forbearance, payment plans and various other options.
The current troubles in the subprime market have already begun to create a ‘credit crunch’ affecting consumers who are experiencing financial difficulties face difficulties qualifying to refinance into a better loan. They are trapped and we are doing everything we can to help them, including looking at new products designed to help troubled borrowers.
That is why we at MBA applaud Freddie Mac and others who have opened the door to creating special ‘rescue products’ to help those borrowers. MBA is working with its members and other stakeholders to develop these new products as effective tools to keep people in their homes.
Forbearance is certainly an effective tool in some cases, but it is not a sustainable long term solution. If we have learned one thing coming out of the Katrina and Rita disasters, it is that blanket policies rarely have the desired blanket effects. Each loan is an individual transaction and situation, one which needs to be addressed individually between the lender and the borrower.”
