WASHINGTON — With Congress back in session and lawmakers still debating how to stem foreclosures, mortgage industry representatives are pitching to Capitol Hill on ways to help.
The American Securitization Forum is working on several sets of protocol to streamline different types of modifications: those held in private-label securities, those refinanced through Hope for Homeowners, and those for option adjustable-rate mortgages that have not reset or are not delinquent.
The first set is expected within the next two weeks. In particular, forum officials said they want to focus on creating modifications that take into account a borrower's total debt.
"It's not just looking at their mortgage debt; it's looking at their entire debt picture," Tom Deutsch, the forum's deputy executive director, said in an interview Monday.
The group pitched many of its ideas in a letter to House Financial Services Committee Barney Frank.
If servicers reduce a borrower's mortgage debt, but the borrower is left with an unsustainable level of debt from credit cards, student loans, or auto loans, reducing the mortgage debt-to-income ratio does not extinguish the risk of foreclosure, Mr. Deutsch said.
The forum is also seeking several changes to programs lawmakers are attempting to improve, such as the Department of Housing and Urban Development's Hope for Homeowners. That program lets lenders write down underwater mortgages and refinance them into cheaper loans backed by the Federal Housing Administration, but has made little impact.
"With some revisions, it can affect hundreds of thousands of borrowers, too, and reach the desired scope and scale that that program was designed for," Mr. Deutsch said.