From the Wall Street Journal:
“There is a loud effort by the Bush administration to cajole the industry into moving beyond case-by-case efforts and to enlist nonprofit groups to reach out to suspicious homeowners. With more vigor and specificity than others (enough to make some officials uneasy), the FDIC's Ms. Bair has urged the industry to extend the two- or three-year initial interest rate permanently for homeowners who are current and whose income indicates they can pay at that rate.
‘Public cajoling was needed to bring more pressure to bear, and we decided to come out with a specific example of how to do it,’ she explains. She says three of 10 top mortgage services are quietly doing what she suggested, although she won't name them.”
From Smart Money:
“So when Countrywide Financial, the U.S.'s largest mortgage lender, announced on Tuesday that it was launching a program aimed at helping cash-strapped homeowners by canceling rate resets or modifying their loans, you could almost hear a collective sigh of relief.
After all, lenders are facing a glut of foreclosures, so it's no surprise that they're warming up to the idea of helping delinquent borrowers by, for example, restructuring a mortgage so the homeowner can catch up on missed payments. However, the actual act of a lender like Countrywide reaching out to people who have yet to miss a payment — but are likely to do so because of a pending rate reset — is something new.”
From CNN Money:
“Some of the workouts would allow borrowers to make larger monthly payments until they catch up. For those deeper in trouble, modifications may include higher payments over the full term of the loan. Others could have their loan refinanced into a low cost, fixed-rate NACA loan, which recently carried a reasonable 5.25 percent interest rate.
Another, powerful, solution is loan restructuring. That could mean freezing an ARM interest rate at its initial level for several years.”