Foreclosure Mess Feels Like a Maze of Dead-ends

April 25, 2008

On April 23rd, Treasury Secretary Paulson met in private with top lenders and servicers to discuss the continuing deterioration of the housing market, urging lenders to develop a program to help borrowers with negative equity. Mortgage lending executives from Washington Mutual, Citigroup, Bank of America, JP Morgan Chase, Wells Fargo, Ocwen Financial, IndyMac Bank, and Residential Capital LLC attended the meeting.

Meanwhile Congress continues to move forward with legislation and FHA initiatives are shaping up to provide modest relief via a refinancing plan that requires lenders to take a loss on the balance due on qualified borrowers. Investors are anxious to determine: (1) if the end is sight or not; (2) how to assess the institutions that are most at risk; (3) and are there any upside opportunities?

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