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Foreclosure Prevention Plan Expanded to 2nd Mortgages
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"Underwater borrowers are more likely to be at risk of foreclosure, so increasing equity for these homeowners through Hope for Homeowners will be an important tool for the Administration," a Treasury statement said.
Meanwhile, a coalition of mortgage investors is fighting a provision in a housing bill that would shield lenders from lawsuits. Lenders have said they are unable to change some mortgages because they fear being sued for breaking their contracts with investors who own pools of mortgages.
The safe harbor provision was included in the House version of the housing bill without much controversy. But in recent weeks, investors have begun organizing against it, including a coalition that hired lobbying firm Patton Boggs.
The coalition argues that lenders have overstated the contract problems and can already modify mortgages. Instead, they say, the provision would shield banks from unrelated lawsuits.
"The safe harbor provision protects mortgage servicers from lawsuits alleging misconduct in the past and future," said Micah Green, a Patton Boggs lobbyist.
Green declined to name the coalition's members, saying the group is still being formed, but that so far it represents about 10 firms that manage more than $100 billion in mortgage investments.
The Senate is expected to vote on the provision as part of a larger housing bill tomorrow.
