Wall Street Journal (10/08/08) P. A5; Simon, Ruth
A letter to the nation's biggest subprime mortgage servicers signed by attorneys general in Arizona, California, Illinois, Iowa, Massachusetts, Michigan, New York, North Carolina, Ohio and Texas urge them to embrace a "comprehensive, streamlined and effective loan modification program" similar to the one announced recently by Bank of America. According to Illinois Attorney General Lisa Madigan, "If the largest lender in the country understands the value of this program for its mortgage customers and the overall economy, so should other lenders." The Bank of America program will focus on subprime adjustable-rate mortgages and option ARMs and could involve lowering the loan amount or interest rate and ensuring borrowers devote no more than 34 percent of their monthly earnings to mortgage payments. "Our first approach is to work with everybody. Later on, if it is necessary, we would consider litigation," says Iowa Attorney General Thomas Miller, who has been in contact with three large mortgage servicers so far.
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