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Inside Washington (02/23/2010)
* WASHINGTON (2/24/10)—The U.S. Treasury Department is considering changes to the Home Affordable Modification Program (HAMP), which include forcing lenders to delay foreclosures by one month if they denied a borrower a mortgage modification. Treasury also is considering allowing trial modifications to be extended by another two to five months to make up for delays in receiving paperwork from bankruptcy courts (American Banker Feb. 23). The Obama administration and the Treasury also are considering a moratorium on certain types of foreclosures. The HAMP program has been criticized by financial observers as ineffective … * WASHINGTON (2/24/10)—Financial observers are debating whether tackling a resolution process for systemically significant institutions is a national or global issue. As the U.S. Congress continues to work toward a plan to help systemically important institutions in the event of failure, the International Monetary Fund is studying whether it is feasible to charge taxes on internationally active institutions to make up resolution costs that the government normally absorbs. A report by Adair Turner, head of the United Kingdom’s Financial Services Authority, indicates why global coordination is needed. It cited the failure of Lehman Bros., which had implications for the United States and abroad. Some argue that creating a global standard is too complicated because it deals not only with how “sovereign countries regulate banks, but how they deal with bankruptcy,” Susan Krause Bell, former senior official at the Office of the Comptroller of the Currency, told American Banker (Feb. 23). Robin Lumsdaine, a former Federal Reserve Board official, said she could see why some might want to coordinate globally, but recognized challenges. She also discussed what it would entail if countries decided to create a fee standard to mitigate resolution costs. In terms of charging institutions extra fees, one must determine the principles on the banks that qualify for the fees, how the fees are based and how they would be used to resolve institutions, she said … * WASHINGTON (2/24/10)—Fannie Mae has opened a mortgage help center in Miami, Fla., to assist struggling borrowers, according to a press release. Services available at the center include reviewing the borrower's loan, discussing foreclosure alternatives, collecting the required documents for the federal Home Affordable Modification Program and reaching a decision on any pending loan workout efforts. Fannie, which is also partnering with the Neighborhood Housing Services of South Florida, will provide information and clarify expectations for the foreclosure prevention process and work to counteract local scams and groups that charge fees for modifications and foreclosure prevention services …


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