Major home mortgage lenders have agreed to adopt a set of principles for dealing with home owners in trouble with high-priced loans, says Sen. Christopher Dodd (D-Conn.), chairman of the Senate Banking Committee.

The agreed upon principles are:

• Contacting distressed borrowers promptly to try to work out arrangements.
• Making loans more affordable by reducing rates, changing terms, and other means.
• Providing refinancing at the lowest cost possible for those who are eligible.

Those agreeing to the principles include the Mortgage Bankers Association, Citigroup Inc., JPMorgan Chase & Co., HSBC Holdings Corp., and Bear Stearns & Co.; government-sponsored mortgage finance giants Fannie Mae and Freddie Mac; AARP; and the Leadership Conference on Civil Rights.

Companies participating in the meeting that didn’t endorse the principles included the nation’s largest lender Countrywide Financial Corp. and Wells Fargo & Co.

Source: The Associated Press, Marcy Gordon (05/02/07)

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