(WSJ) Some big U.S. banks are pushing back against the idea that they should slash mortgage balances for millions of troubled borrowers.
In written testimony prepared for a hearing in Washington Tuesday of the House Financial Services Committee, some of the nation’s top mortgage lenders warned of the risks of relying heavily on forgiving principal as a means of averting foreclosures and argued for concentrating mainly on other methods, such as reducing interest rates.
That may set up a clash with Rep. Barney Frank, chairman of the committee, and other lawmakers eager for more aggressive action to prevent foreclosures. In a letter last month to four big banks, Rep. Frank, a Massachusetts Democrat, argued that “to save homes on a large scale, we must move past temporary modifications in interest rates or terms and focus on permanent principal reductions that result in truly sustainable mortgages.”
Read more from the WSJ