Industry sets template for loan modifications
A framework sponsored by the US administration to soften the impact of subprime resets provides comfort for servicers and clarity for investors
A US government-backed initiative announced in December aims to soften the impact on delinquencies caused by subprime adjustable rate mortgage (Arm) resets over the next two years.
The plan, put together by the American Securitization Forum (ASF) with support from the US Department of the Treasury, aims to streamline loan modifications - the process whereby servicers amend the terms of loans for borrowers who will struggle to afford interest payments at a stepped-up rate.
The capacity of servicers
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