U.S. Banks Receive Proposal For Dealing With Troubled Mortgages

(Reuters) - U.S. banks received a proposal from state attorneys general and several federal agencies that could require them to reduce loan balances of troubled mortgage borrowers, the Wall Street Journal said, citing people familiar with the matter.

The 27-page document, sent to the nation's largest mortgage lenders, does not specify penalties or fines but instead represents a detailed code of conduct for how they must treat borrowers throughout the loan modification process, the sources told the paper.

The proposed code of conduct would require banks to first consider reducing loan balances of mortgage borrowers in certain instances before modifications or foreclosure, the paper said.

(Reporting by Sakthi Prasad in Bangalore; Editing by Tomasz Janowski)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[SitandStay]

09:10 PM on 03/06/2011

I am sure private security corporations are the only businesses making money today.
Tomorrow they will add moat building to their services.

[SitandStay]

09:03 PM on 03/06/2011

"U.S. banks received a proposal from state attorneys general and several federal agencies that could require them to reduce loan balances of troubled mortgage borrowers, the Wall Street Journal said, citing people familiar with the matter."

Translation - Oh, please, please, please, propose something because the people are now seeing INSIDE JOB that was kept out of the media (as if advertising wasn't at its cheapest in 25 years and no reporter was wanting to report on the documentary). They are getting angery.
If you don't throw them a bone...we will...we will....we will.....allow you to default on all their pensions and that will show you mean, bad banks.

[nothingchanges]

11:57 AM on 03/05/2011

Government oversight.

"If you don't treat your customers, the way you should, we might do something.......eventually....
IF we can think of a way of doing it without jeopardizing access to your generous campaign contributions."

Government oversight? More like Government overlook. Congress, the best government corporate money can buy.

[Veri]

06:21 AM on 03/05/2011

Proposed code of conduct = self-regulation = fail.

[Mr Hankey]

12:49 AM on 03/05/2011

Homeowners in financial distress, join us:

www.wamuloanfraud.com

[karen1p]

12:36 AM on 03/05/2011

The Washington State legislature in back-door dealings with bank lobbyists, sold out their constituents for $250 per foreclosure. Been working on amending this bill to include "clear chain of title" requirements to prove ownership....and found out today that these f***ing (bought) legislators sold out the victims of the bank fraud for $250 a home.

Bet that makes you feel all cozy and warm inside?

F***ing pathetic.

[Mr Hankey]

12:29 AM on 03/05/2011

....but no banksters go to jail for fraud?

[dadw5boys]

08:06 PM on 03/04/2011

President Obama offered the Banks a carrot to keep people in their homes that did not work so here it the whip !!!!!!

[Telly Savalas]

06:37 PM on 03/04/2011

I'm sure the banks - being the good corporate citizens that they are - will adhere strictly to good ethics and fairness in all their dealings with consumers.
(Tongue removed from cheek.....)

[dweezil52]

04:52 PM on 03/04/2011

Any supposed "requirement" that essentially starts with asking the debt holder "Aw, c'mon, be a sport!!" is doomed to failure.

[karen1p]

12:40 AM on 03/05/2011

That would be "alleged debt holder."

Why would they need to forge these documents if they had the right to collect the debt?

[dweezil52]

08:48 AM on 03/05/2011

Don't see a mention anywhere in the article about forging documents. And the proposal is just that - a "proposal", asking the banks to do something. And the banks will have a good laugh over it.

And "alleged debt holder" is correct. It's like a game of mortgage, mortgage, who holds the mortgage out there in a lot of cases.

[lizinsarasota]

02:52 PM on 03/04/2011

What we all need to acknowledge is this: if you or me came to court with a phony affidavit and the court found out about it, they'd put us UNDER the jail. If you or me drove off with a tank of gas without paying for it, or stole a banana from Wal Mart, we'd be arrested and put in jail.
So, what's the problem here? It is simply economy of scale? Is it simply the overwhelming evidence that the banks and their attorney stooges deliberately gamed the system and filed fraudulent documents by the hundreds of thousands in courthouses all over the country - and we say... what? What do we say about FRAUD? What do we say about the rule of LAW?
Are we going to passively sit by and have one standard of TRUTH for bankers and another standard for regular people???

People need to go to jail over this, the largest fraud ever perpetrated on the American public. Lawyers need to be disbarred.
It needs to happen, and no fine - however large - can make up for what has happened to us.

[karen1p]

12:42 AM on 03/05/2011

I've just decided to initiate foreclosures on all the state of Washington legislators. Why not try this in your state?

Just found out they sold all Washingtonians down the river for $250 bucks a pop. That's right, Washington homeowners, that is all you are worth to your DEMOCRATIC legislature.

[IndyFem]

02:44 PM on 03/04/2011

This is hilarious!!
State Attorney generals are "PROPOSING" a Rule of Conduct for the Big Banks.
Even though it is based on the honor system...with no penalties for non-compliance....
they can't even finalize these "Rules of Conduct"...without first giving them a Proposal??????
PLEASE

[Bertalein]

02:06 PM on 03/04/2011

Big Banks, stop being crooked! Pretty please, with sugar on it!

[eaglett1111]

02:00 PM on 03/04/2011

If this "proposal" has no teeth, it is just another waste of paper. When are they going to stop ASKING Wall Street to play nice instead of Demanding that they do and identifying strict and logical consequences if they don't. I remember logical consequences in parenting classes. If it works for kids, should work for the bullies on Wall Street. Asking nicely doesn't work for either.