American Banker (08/19/08); Berry, Kate
While many experts believe the biggest obstacle to the new federal housing law's $300 billion refinancing assistance program is getting lenders and investors to agree to writing down a portion of the original mortgage, industry executives point out other challenges. They note that it will be difficult for servicers without origination units holding FHA licenses to participate in the program, requiring them to partner with FHA-approved lenders. "It's one of the reasons FHASecure was never very successful, because in order for it to work, it's a program offered by a servicer to customers, and they can't offer it because they're not a lender," says LenderLive Network Inc. President and CEO Rick Seehausen. Additionally, originators of the new loans could still be held liable in the event of poor performance; and experts note that some servicers might want to hang onto their accounts by modifying loans and forgiving a portion of the principal instead of participating in the refinancing program.
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