The Federal Financial Agencies have issued new standards for subprime mortgages. These new standards include protection for consumers with adjustable rate mortgages which require that the lender provide 60 days notice prior to a rate increase to give consumers time to refinance their loans without a prepayment penalty. They also encourage lenders to enter into workout arrangements with borrowers prior to commencing foreclosure proceedings. Follow this link to the full text of this document. http://www.federalreserve.gov/boarddocs/press/bcreg/2007/20070629/attachment.pdf
Friday, June 29, 2007
June 29, 2007 01:44 PM Eastern Daylight Time
WaMu Response from David Schneider, President, Home Loans, Regarding Interagency Statement on Subprime Mortgage Lending
SEATTLE--(BUSINESS WIRE)--WaMu (NYSE:WM) fully supports the guidance and the goal of ensuring that mortgage loans are underwritten in a prudent fashion and communicated in an understandable way. No party wins when a lender is forced to foreclose on a borrower. We are well positioned to implement the guidance in our business. We've offered subprime mortgage products for more than 20 years and are focused on providing clear, understandable disclosures for our customers and ongoing training for our sales force.
WaMu remains committed to offering a range of products to meet individual customer needs. We are also committed to helping our current borrowers stay in their homes who may no longer fit current qualifying standards yet have a proven payment history. As part of this commitment, we will refinance or modify up to $2 billion in subprime loans at discounted interest rates to assist homeowners in stabilizing their finances and avoiding foreclosure. Our goal is to help our customers understand their various options and address their financial needs before they begin having problems making payments.
We remain concerned about the unlevel playing field that exists because the guidance does not apply to all lenders.