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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: MulhollandDrive who wrote (76250)	4/18/2007 3:23:43 PM
From: Broken_Clock	Respond to of 306849

Back OT ====== Senators see no need for subprime "bailout" Wed Apr 18, 2007 3:04pm ET162 By Patrick Rucker WASHINGTON (Reuters) - The Democratic and Republican leaders of the U.S. Senate Banking Committee said on Wednesday they see no need for a federal bailout of the subprime mortgage lending industry. Both spoke after a morning summit on the crisis among subprime mortgage borrowers, who qualified for loans despite shaky credit, and their lenders. The meeting drew lawmakers, regulators, mortgage industry representatives and consumer groups. "I'm not interested in (a bailout) at this point. I think this problem can be addressed without going down that route," said Sen. Chris Dodd, the Democratic chairman of the committee. Sen. Richard Shelby, the most senior Republican on the panel, said he would be "unalterably opposed" to a costly federal program to rescue troubled mortgage borrowers and lenders. "I believe the subprime problem will go on for several years," Shelby said, but added that market forces would be corrective. Dodd, of Connecticut, said the participants had agreed to several principles to deal with the crisis but that he would convene another meeting on May 2 to hear concrete plans. According to a leaked document prepared by Dodd's staff, many of the principles concern ways to help borrowers facing foreclosure. Mortgage servicers should seek to modify the terms of subprime loans before their interest rates are reset higher and set aside dedicated resources and staff to help those borrowers, according to the document. Fannie Mae and Freddie Mac should work with lenders to make credit available to borrowers who have trouble refinancing out of subprime loans, the document added. After the conference, Freddie Mac promised $20 billion in new financing to help subprime borrowers stay in their homes. Another principle calls for servicers to make early contact with subprime borrowers with adjustable-rate mortgages to determine if they qualify for a more stable loan, according to the document. The participants weighed "points of general consensus," Dodd told a news conference after the summit. "I can't speak for everybody in the room, but my sense was that these were agreed upon," he said. An explosion of subprime mortgages available to borrowers with damaged credit helped fuel a five-year run-up in home values that ended in 2005. Now that many of those loans are becoming delinquent, regulators, lenders and lawmakers are trying to stabilize the home finance system. Among the participants in Wednesday's gathering, titled the Homeownership Preservation Summit, were Sheila Bair, chairman of the Federal Deposit Insurance Corporation, the chief executive officers of Fannie Mae and Freddie Mac and senior executives from Citigroup, JPMorgan Chase & Co., Countrywide and HSBC, among other lenders. Representatives from consumer and trade groups also were invited. "As we finished the meeting there was a sense that there were principles that are being worked on that the industry has the ability to handle," said John Robbins, chairman of the Mortgage Bankers Association.