New Bid On Foreclosure Mediation Raises CUs Ire
WASHINGTON – NAFCU raised concerns last night about pending legislation on foreclosure mediation which could be mandatory for lenders.
“While NAFCU recognizes this legislation as a well-intentioned effort to mitigate foreclosures in the wake of the subprime mortgage crisis, NAFCU cannot support legislation that opens the door for the establishment of loss mitigation programs, or any other bankruptcy court-led mediation efforts, in which lender participation is involuntary,” wrote NAFCU President Fred Becker, in a letter to the chairman and ranking minority member of the Senate Judiciary Committee, which is drafting the Limiting Investor and Homeowner Loss in Foreclosure Act.
“NAFCU urges Congress to recognize that credit unions have an inherent interest in the communities that they serve and an excellent record of working with their member-owners in helping with loan modifications where appropriate,” Becker wrote.
“Credit unions did not engage in the risky subprime lending that contributed to the high volume of foreclosures today, and should not be unfairly pushed into situations that could lead to a judge penalizing community based lenders if they do not agree to loan modifications,” he added. “While the intent of this legislation may be noble, we have concerns about the consequences that could arise from its enactment at this time and thus urge the Committee not to report this bill.”