Regulators urge banks to work with distressed mortgage borrowers

09/5/2007 | Chicago Tribune (tiered subscription model)

Loan-service companies were urged by the Federal Reserve and other regulators Tuesday to work with borrowers threatened by default. The new guidelines, which are not mandatory, follow comments by President George W. Bush on Friday in which he indicated he wanted to help homeowners with subprime and high-interest mortgages avoid foreclosure. "It is vital that mortgage servicers work proactively with borrowers facing much higher payments as their interest rates reset," said Sheila Bair, chairwoman of the Federal Deposit Insurance Corp.

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