The Mortgage Investors Coalition is calling on the Treasury Department to reject recent proposals from the banking industry to include more aggressive interest-only periods for mortgages modified under the Home Affordable Modification Program (HAMP).
‘Modifying homeowners into mortgages that have future payment increases and adjustable interest rates will not improve a homeowner's situation,’ says Micah Green, a partner at Patton Boggs who represents the coalition. ‘Doing so would ignore the fact that many of these homeowners are already in interest-only or other nontraditional mortgages and owe more on their mortgage than their home is currently worth."
The coalition, which was formed in March by asset managers who currently hold over $100 billion in residential mortgage-backed securities, believes that restoring equity through a refinance is a better approach.
‘[A]ny changes to HAMP should focus on refinancing homeowners into long-term affordable fixed-rate mortgages, so homeowners and the housing market don't have the threat of interest-rate resets, balloon payments or large payment shocks in the future that could drive additional foreclosures,’ Green adds.
SOURCEÂ Mortgage Investors Coalition