A key lawmaker says he is working with banks, regulators and the Obama administration on ways to boost the government’s struggling foreclosure prevention effort.
Rep. Barney Frank, D.-Mass, said he is in talks with several major lenders in an effort to remove a key obstacle: lenders who hold second mortgages like home equity loans. Those loans, in many cases, are now worthless, but banks are reluctant to release their claims.
Those lenders can block mortgage modifications that reduce the total loan amount owed, even in cases where lenders that have senior claims want to do so.
“Many investors have told us that they’re ready to get something instead of nothing,” Frank told a crowd of minority real estate agents.
Copyright © 2010 The Associated Press, Alan Zibel, AP real estate writer.
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