Waters Offers Foreclosure Measure

American Banker (04/03/08) P. 3; Blackwell, Rob
Citing the slow pace of current efforts to curtail the country's foreclosure epidemic, Rep. Maxine Waters, D-Calif., has rolled out a new proposal that would block foreclosures in cases where lenders and servicers fail to make a "reasonable" attempt at workouts. "The fundamental problem," according to the lawmaker, "is that the mortgage servicers have no legal obligation to make a reasonable effort to keep a borrower in delinquency in his or her home, even where that borrower may have been the victim of a predatory, unaffordable loan." To correct that, the legislation would compel servicers to provide a toll-free number to help distressed borrowers and prohibit them from requiring consumers to waive their legal rights as a condition to a loan modification. In addition to that bill, Waters also has introduced a measure that would set aside $10 billion in block grants for states and big cities to acquire and rehabilitate foreclosed homes.