American Banker (04/25/08) P. 1; Hopkins, Cheyenne
Treasury Secretary Henry Paulson recently held a 90-minute private meeting with Treasury undersecretary of domestic finance Robert Steel and executives of Washington Mutual Inc., Citigroup Inc., Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Ocwen Financial Group, IndyMac Bancorp Inc. and Residential Capital LLC to discuss ongoing deterioration in the housing market. Paulson encouraged the lenders to develop a strategy to assist borrowers whose mortgage balances exceed their homes' value, noting that it will take too long to pass foreclosure relief legislation. Additionally, he underscored the importance of improving aggregate data to gauge the success of loan modifications, requesting that lenders offer more specific data, meet with him individually on their progress and establish working groups to create best practices for modifications. Participants say borrower psychology and its impact on modifications was discussed, with lenders contending that write downs--not interest rate reductions--are more likely to keep borrowers out of foreclosure.
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