By Amy Wyeth
Bnker & Tradesman Staff Writer
 
Lenders must modify more loans, and at a faster clip, to help hundreds of thousands of U.S. homeowners going under financially due to failing subprime mortgages.

Guests and panelists alike repeated that theme like a mantra at this morning’s Open Doors conference in Boston, sponsored by The Warren Group, publishers of Banker & Tradesman, and the Citizens’ Housing and Planning Association.

The problem, they say, is that there is no system-wide policy for re-working troubled loans. Keynote speaker Congressman Barney Frank, chairman of the U.S. House Financial Services Committee, said next year could see more regulation written to address the issue from the top down.

“If we do what we should do next year [to address the crisis], next year could be one of the most exciting years in new public policy since the New Deal,” Frank told more than 350 lenders, government officials and housing advocates. 

Many expressed frustration that things aren’t moving fast enough.

“We’ve been extremely frustrated [with the small number of modifications],” Massachusetts Bank Commissioner Steven L. Antonakes said, addressing a panel on state and federal regulations. 

Antonakes and others said there are financial incentives to complete loan modifications, rather than foreclose.

William J. Fenton, Bank of America’s senior vice president for marketing and community development, told guests that through August, the bank has helped 169,000 homeowners nationwide avoid foreclosure through modifications.

Asked if the bank was coming up with any systemic way of modifying these loans, especially those it inherited from Countrywide Financial, Fenton said, “We are trying to and trying to … hopefully there will be more systemic ways of dealing with these loans.”

Earlier today, Bank of America announced an $8.4 billion agreement with 11 states to help modify problem loans, specifically those originated by Countrywide. Incentives include interest-only payments and waivers of certain fees for borrowers in those states.

The states included in the settlement are California, Connecticut, Illinois, Arizona, Florida, Iowa, Michigan, North Carolina, Ohio, Texas and Washington.

Timothy Warren Jr., president and CEO of The Warren Group, said he was pleased the conference turnout filled the ballroom at The Colonnade Hotel to standing room only.

But Juan Bonilla, homeownership education coordinator for Lawrence CommunityWorks, said he hoped the event would result in more than just ideas.

“Every time we come out to one of these, I continue to hope that something good will come of it,” he said. “Not just more ideas – we need more action.”