Impatience Grows Among Lawmakers With Lenders, Mortgage Servicers On Lack Of Progress On Loan Modifications

The Washington Independent reports:

• A top Democrat on Monday warned the nation’s banks that, unless they get more aggressive in modifying mortgages to prevent foreclosure, Congress will renew previous efforts to empower families to keep their homes through bankruptcy. But Sen. Richard Durbin (Ill.), the upper-chamber’s second ranking Democrat, also gave the banks three months to comply with his ultimatum — a span over which roughly 1 million new homeowners are projected to enter foreclosure. [...] “I want to put the banks and mortgage servicers on notice today,” said Durbin, who sent letters Monday to each of the 34 banks that have already signed on to participate in the administration’s modification program.

• The comments arrive just days after another powerful Democrat, House Financial Services Committee Chairman Barney Frank (D-Mass.), issued a similar threat to revisit cramdown. The statements are evidence of a growing impatience among some lawmakers with the banking industry’s efforts to stabilize the still-volatile housing market.

For more, see Durbin Gives Bailed Out Banks ‘Cramdown’ Ultimatum (Senate Democrat Threatens to Bring Back Bankruptcy Law Change).